Auditor Report of Mac Charles (India) Ltd.

Mar 31, 2018

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF MAC CHARLES (INDIA) LIMITED

Report on the Audit of the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Mac Charles (India) Limited (‘the Company’), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss, the statement of changes in equity and the statement of cash flows for the year then ended, and summary of significant accounting policies and other explanatory information (herein after referred to as “Standalone financial statements”).

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 state of affairs, profit (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibility

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

While conducting the 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 of the standalone financial statements 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 standalone financial statements are free from material misstatement.

Auditor’s Responsibility (continued)

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

We are also responsible to conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause an entity to cease to continue as a going concern.

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 2018, its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Other Matter Paragraph

The comparative financial information of the Group for the year ended 31 March 2017 and restated opening balance sheet as at 1 April 2016 included in these standalone financial statements, are based on the previously issued statutory financial statements, audited by the predecessor auditor whose report for the year ended 31 March 2017 and 31 March 2016 dated 8 August 2017 and 3 August 2016 respectively expressed an unmodified opinion on those standalone financial statements.

Our opinion above on the standalone financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’), issued by the Central Government in terms of Section 143(11) of the Act, we give in Annexure A, a statement on the matters specified in paragraph 3 and 4 of the Order.

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

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

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

(c) the balance sheet, the statement of profit and loss (including other comprehensive income), statement of changes in equity and the statement of cash flows 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.

(e) on the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 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:

a. the standalone financial statements disclose the impact of pending litigations on the financial position of the Company - refer note 40 to the standalone financial statements;

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

c. There has been no delay in transferring amounts to the Investor Education and Protection Fund by the Holding Company during the year ended 31 March 2018 and;

d. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 March 2018. However amounts as appearing in the audited standalone financial statements for the period ended 31 March 2017 have been disclosed.

As referred to in our Independent Auditor’s Report to the members of Mac Charles (India) Limited (‘the Company’) on the Standalone financial statements of the Company for the year ended 31 March 2018, we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified every year. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the programme, physical verification of fixed assets was carried out during the year and no material discrepancies were noted.

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

(ii) According to the information and explanations given to us and on the basis of our examination of the records, the inventories have been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable. No discrepancies were identified on physical verification of inventories between physical stocks and book records.

(iii) According to the information and explanations given to us and on the basis of our examination of the records, the Company has granted unsecured loans to two companies covered in the register maintained under Section 189 of the Act and;

(a) In our opinion, the rate of interest and other terms and conditions on which loans had been granted to the companies listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.

(b) In case of loans granted to the two companies covered in the register maintained under Section 189 of the Act, the loans and interest are repayable on demand. According to the information and explanation given to us, the borrowers have been regular in the repayment of the principal amount.

(c) There are no overdue amounts in respect of the loan granted to companies covered listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanation given to us, the Company has complied with the provisions of Section 185 and 186 of the Act with respect to loans advanced and investments made. Further there are no guarantees and securities given in respect of which provision of Section 185 & 186 of the Act are applicable.

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

(vi) According to the information and explanation given to us, the Central Government of India has not prescribed the maintenance of cost records under Section 148(1) of the Act, for any of the services rendered and goods sold by the Company.

(vii) (a) According to the information and explanations given to

us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Service tax, Sales-tax, Value added tax, Income tax dues, Goods and Service tax, Cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employee’s State Insurance, Duty of Customs and Duty of Excise during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Sales-tax, Value added tax, Goods and Service tax, Income tax, Service tax, Cess and other material statutory dues were in arrears, as at 31 March 2018, 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 Provident Fund, Sales-tax, Value added tax, Income tax, Service tax, Goods and Service tax, Cess and other material statutory dues which have not been deposited with the appropriate authorities on account of any dispute.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers, financial institutions and debenture holders. The Company does not have any dues from the government.

(ix) According to the information and explanations given to us and on the basis of our examination of the records, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanations given to us, the term loans taken by the Company were applied for the purposes for which they were raised.

(x) According to the information and explanations given to us, no material 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 explanation given to us and on the basis of our examination of the records of the Company, the Managerial Remuneration paid by the company is in accordance with the limits as specified in Section 197 of Companies Act, 2013.

(xii) In our opinion and 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) In our opinion and according to the information and explanations given to us, and based on an examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or 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, the Company has not entered into any non-cash transaction with directors or person connected with him as referred to in Section 192 of Companies Act 2013. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

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 Mac Charles (India) Limited (‘the Company’) as of 31 March 2018 in conjunction with our audit of the standalone 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 (‘Guidance Note’) 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 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 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.

for B S R & Associates LLP

Chartered Accountants

Firm’s registration number: 116231W/ W-100024

Aravind Maiya

Partner

Membership number: 217433

Bengaluru 23 May 2018

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Mar 31, 2015

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

Management's Responsibility for the 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 flow of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these 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 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 disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(b) in the case of 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement, 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 March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a Director in terms of section 164(2) of the Act.

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in note 35 to the financial statements.

(ii) The Company did not have any long term contract for which there was any material foreseeable loss.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. However, with regard to the disputed/subjudiced dividends referred to in Note no. 9.1, the dividend warrants thereof (demand drafts) are in custody of the Company.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The process of numbering the fixed assets and updating the same into the fixed assets register is in progress.

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed during such verification.

(ii) In respect of its inventory:

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

(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) The Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of stocks as compared to book records are not material and have been properly dealt with in the books of account.

(iii) In respect of its loans: The Company has granted an unsecured loan to its wholly owned subsidiary.

(a) Having regard to the fact that no agreement/contract is entered into with the subsidiary, there is no stipulation as to repayment and as such paragraph 3(iii)(a) of the order is not applicable to the Company in respect of repayment of principal amount.

(b) Since there is no stipulation regarding repayment of principal and interest, paragraph 3(iii)(b) of the order is not applicable to the Company in respect of overdue amount in excess of Rupees one lakh.

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

(v) The Company has not accepted deposits to which the directives issued by the Reserve Bank of India and provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder apply.

(vi) As informed to us, the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Companies Act, 2013, for the Company.

(vii) In respect of its statutory dues :

(a) According to the records of the Company and the information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities during the year.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, details of disputed statutory dues which have not been deposited in the case of Income Tax are given in the table below :

Sl. Nature of Period to which the Amount No. Dues Dispute relates in Rupees

1. Income Tax A.Y. 1997-98 9,55,691

2. Income Tax A.Y.2010-11 10,34,668

Nature of Dues Forum where the Dispute is Pending Remarks

Income Tax Honourable High Court of Karnataka The amount in dispute is adjusted by the Income Tax Department out of refund due to the Company

Income Tax Honourable High Court of Karnataka The amount in dispute is adjusted by Income Tax Department out of refund due to the Company.

(c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. However, with regard to the disputed/ subjudiced dividends referred to in Note no. 9.1, the dividend warrants thereof (demand drafts) are in custody of the Company.

(viii)The Company has neither accumulated loss as at March 31, 2015 nor has it incurred any cash loss during the financial year ended on that date or in the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to financial institutions or banks.

(x) According to the information and explanations given to us, and records examined by us,the Company has not given any guarantee for loans taken by others from bank or financial institutions during the year, the terms and conditions whereof are prejudicial to the interest of the Company.

(xi) In our opinion and according to the explanations given to us, the Company has not obtained any term loans during the year.

(xii) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For K. B. Nambiar & Associates

Chartered Accountants

(Firm Regn. No. 002313S)

Bangalore Raj Kumar K

21 August 2015 Partner (M.No.208039)

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Mar 31, 2014

We have audited the accompanying financial statements of MAC CHARLES (INDIA) LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014 and also the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"), read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and in accordance with the principles generally accepted in India.This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

(c) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

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

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

ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The process of numbering the fixed assets and updating the same into the fixed assets register is in progress.

(b) The fixed assets have been physically verified by the Management during the year and no material discrepancies were noticed during such verification.

(c) Fixed Assets disposed off during the year were not substantial.

(ii) In respect of its inventory:

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

(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) The Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of stocks as compared to book records are not material and have been properly dealt with in the books of account.

(iii) In respect of its loans:

(a) The Company has granted an unsecured loan to its wholly owned subsidiary. The maximum amount outstanding during the year was Rs.2,18,32,981/- and the year-end balance of the loan is Rs 1,92,68,689/-.

(b) Having regard to the fact that the loan granted to its wholly owned subsidiary is interest free and unsecured and also that no agreement/contract is entered into with the subsidiary, the terms and conditions of loan granted to the subsidiary are in our opinion prima facie not prejudicial to the interests of the Company.

(c) In the absence of an agreement/contract there is no stipulation as to repayment and as such paragraph 4(iii)(c) of the order is not applicable to the Company in respect of repayment of principal amount.

(d) Since there is no stipulation regarding repayment of principal, paragraph 4(iii)(d) of the order is not applicable to the Company in respect of overdue amount in excess of rupees one lakh.

(e) The Company has taken an unsecured loan from the

Managing Director during the year. The maximum amount outstanding during the year was Rs.4,60,00,000/- and the year-end balance of the loan is NIL.

(f) Having regard to the fact that the loan is interest free and unsecured and also that no agreement/contract is entered into, the terms and conditions of the loan taken are in our opinion prima facie not prejudicial to the interests of the Company.

(g) The loan having been fully repaid during the year, paragraph 4(iii)(g) of the Order is not applicable to the Company.

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

(v) The Company has not entered into any contracts or arrangements referred to in Section 301 of the Companies Act, 1956. Hence paragraph 4(v)(a) and 4(v)(b) of the order is not applicable to the Company.

(vi) The Company has not accepted deposits to which the directives issued by Reserve Bank of India and provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply.

(vii) The Company has an internal audit system commensurate with its size and the nature of its business.

(viii) As informed to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956, for the Company.

(ix) In respect of its statutory dues

(a) According to the records of the Company and the information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, details of disputed statutory dues which has not been deposited in the case of Income Tax are given in the table below :

Sl Nature of Period to which the Amount Forum where the No Dues Dispute relates in Rupees Dispute is Pending

1 Income Tax A.Y. 1997-98 9,55,691 Honourable High Court of Karnataka

2 Income Tax A.Y.2010-11 10,34,668 Appellate Commissioner of Income Tax

Remarks

The amount in dispute is adjusted by the Income Tax Department out of refund due to the Company

The amount in dispute is adjusted by Income Tax Department out of refund due to the Company.

(x) The Company has neither accumulated loss as at 31 March 2014 nor has it incurred any cash loss during the financial year ended on that date or in the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to financial institution or bank.

(xii) According to the information and explanations given to us, and records examined by us, during the year the company has not granted loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

(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) In our opinion and according to the information and explanations

given to us, the Company has not obtained any term loan 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 report that no funds raised on short term basis have been used for long term investment by the Company.

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

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

(xx) The Company has not raised money by public issue during the year.

(xxi) I n our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For K. B. Nambiar & Associates

Chartered Accountants (Firm Regn. No. 002313S) Raj Kumar K Partner (M.No.208039)

Bangalore 4 August 2014

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of MAC CHARLES (INDIA) LIMITED ("the Company")'' which comprise the Balance Sheet as at 31 March'' 2013 and also the Statement of Profit and Loss and Cash Flow Statement for the year then ended'' and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment'' including the assessment of the risks of material misstatement of the financial statements'' whether due to fraud or error.

In making those risk assessments'' the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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 '' 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 Balance Sheet'' the Statement of Profit and Loss and the Cash Flow Statement'' complies with the Accounting Standards referred to in subsection (3C) of section 211 of the Act;

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 Act.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The process of numbering the fixed assets and updating the same into the fixed assets register is in progress.

(b) The fixed assets have been physically verified by the Management during the year and no material discrepancies were noticed during such verification. However'' fixed assets which are fully depreciated in earlier years and not in use have been written off during the year. Also'' refer footnote to schedule 11 in the Notes to financial statements.

(c) Fixed Assets disposed off during the year were not substantial.

(ii) In respect of its inventory:

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

(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) The Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of stocks as compared to book records are not material and have been properly dealt with in the books of account.

(iii) In respect of its loans:

(a) The Company has granted an unsecured loan to its wholly owned subsidiary. The maximum amount outstanding during the year was Rs.2''43''10''759/- and the year-end balance of the loan is Rs 2''18''32''981/-.

(b) Having regard to the fact that the loan granted to its wholly owned subsidiary is interest free and unsecured and also that no agreement/contract is entered into with the subsidiary'' the terms and conditions of loan granted to the subsidiary are in our opinion prima facie not prejudicial to the interests of the Company.

(c) In the absence of an agreement/contract there is no stipulation as to repayment and as such paragraph 4(iii)(c) of the order is not applicable to the Company in respect of repayment of principal amount.

(d) Since there is no stipulation regarding repayment of principal'' paragraph 4(iii)(d) of the order is not applicable

to the Company in respect of overdue amount in excess of rupees one lakh.

(e) The Company has not taken any loans'' secured or unsecured from companies'' firms or parties covered in the register maintained under Section 301 of the Act. Accordingly'' paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us'' having regard to the company''s explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining 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 inventory and fixed assets and the sale of goods and services. During the course of our audit'' we have not observed any major weakness in such internal control system.

(v) The Company has not entered into any contracts or arrangements referred to in Section 301 of the Companies Act'' 1956.Hence paragraph 4(v)(a) and 4(v)(b) of the order is not applicable to the Company.

(vi) The Company has not accepted deposits to which the directives issued by Reserve Bank of India and provisions of Section 58A'' 58AA or any other relevant provisions of the Companies Act'' 1956 and the rules framed there under apply.

(vii) The Company has an internal audit system commensurate with its size and the nature of its business.

(viii) As informed to us'' the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act'' 1956'' for the Company.

(ix) In respect of its statutory dues

(a) According to the records of the Company and the information and explanations given to us'' the Company is regular in depositing undisputed statutory dues including Provident Fund'' Investor Education and Protection Fund'' Employees'' State Insurance'' Income Tax'' Sales Tax'' Wealth Tax'' Service Tax'' Customs Duty'' Excise Duty'' Cess and any other statutory dues with the appropriate authorities during the year.

(b) To the best of our knowledge and belief and according to the information and explanations given to us'' details of disputed statutory dues which has not been deposited in the case of Income Tax and are given in the table below :

Sl. Nature of Period to Which the Amount No. Dues Dispute relates in Rupees

1 Income Tax A.Y. 1997-98 9''55''691

2.Income Tax A.Y.2010-11 10''34''668

Name Forum where the Dispute is Pending Remarks

Income Tax Honourable High Court of Karnataka The amount in dispute is adjusted by the Income Tax Department out of refund due to the Company

Income Tax Appellate Commissioner of Income Tax The amount in dispute is adjusted by Income Tax Department out of refund due to the Company.

(x) The Company has neither accumulated loss as at 31 March 2013 nor has it incurred any cash loss during the financial year ended on that date or in the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to financial institution or bank.

(xii) According to the information and explanations given to us'' and records examined by us'' during the year the company has not granted loan or advance on the basis of security by way of pledge of shares'' debentures and other securities.

(xiii) The provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us'' the Company is not a dealer or trader in securities.

(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) In our opinion and according to the information and explanations given to us'' the Company has not obtained any term loan 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 report that no funds raised on short term basis have been used for long term investment by the Company.

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

(xix) The Company has not issued any debenture during the year.

(xx) The Company has not raised money by public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us'' no fraud on or by the Company has been noticed or reported during the year.

For K. B. Nambiar & Associates

Chartered Accountants

(Firm Regn. No. 002313S)

Bangalore V. V. Gabriel

30 July 2013 Partner

(M.No.213936)

---

Mar 31, 2012

We have audited the attached Balance Sheet of MESSRS. MAC CHARLES (INDIA) LIMITED ('the Company') as at 31 March 2012 and also the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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, subject to Note No.29 regarding non- confirmation of balances ;

(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 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, 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 ;

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

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

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

(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The process of numbering the fixed assets and updating the same into the fixed assets register is in progress.

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed during such verification.

(c) Fixed Assets disposed off during the year were not substantial.

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

(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) The Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of stocks as compared to book records are not material and have been properly dealt with in the books of account.

(iii) (a) The Company has granted an unsecured loan to its wholly owned subsidiary. The maximum amount outstanding during the year was Rs.3,58,98,614/- and the year-end balance of the loan is Rs.2,43,01,392/-.

(b) Having regard to the fact that the loan granted to its wholly owned subsidiary is interest free and unsecured and also that no agreement/contract is entered into with the subsidiary, the terms and conditions of loan granted to the subsidiary are in our opinion prima facie not prejudicial to the interests of the Company.

(c) In the absence of an agreement/contract there is no stipulation as to repayment and as such paragraph 4(iii)(c) of the order is not applicable to the Company in respect of repayment of the principal amount.

(d) Since there is no stipulation regarding repayment of principal, paragraph 4(iii)(d) of the order is not applicable to the Company in respect of overdue amount in excess of rupees one lakh.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, having regard to the company's explanations that some ofthe items purchased are of special nature and suitable alternative sources are not readily available for obtaining 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 inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) The Company has not entered into any contracts or arrangements referred to in Section 301 of the Companies Act, 1956. Hence paragraphs 4(v)(a) and 4(v)(b) of the order is not applicable to the Company for the year.

(vi) The Company has not accepted deposits to which the directives issued by Reserve Bank of India and provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply.

(vii) The Company has an internal audit system commensurate with its size and the nature of its business.

(viii)As informed to us, the Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956, for the Company.

(ix) (a) According to the records of the Company and the information and explanations given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, details of disputed statutory dues which has not been deposited in the case of Income Tax are given in the table below :

Sl. Nature of Period to Which the Amount

No. Dues Dispute relates in Rupees Forum where the Dispute is Pending

1 Income Tax A.Y. 1997-98 9,55,691 Honorable High Court of Karnataka



Nature of Due Remarks

Income Tax The amount in dispute is adjusted by the Income Tax Department out of refund due to the Company

(x) The Company has neither accumulated loss as at 31 March 2012 nor has it incurred any cash loss during the financial year ended on that date or in the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to financial institution or bank.

(xii) According to the information and explanations given to us, and records examined by us, during the year the company has not granted loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

(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) In our opinion and according to the information and explanations given to us, the Company has not obtained any term loan 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 report that no funds raised on short term basis have been used for long term investment by the Company.

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

(xix) The Company has not issued any debenture during the year.

(xx) The Company has not raised money by public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For K. B. Nambiar & Associates

Chartered Accountants

(Firm Regn. No. 002313S)

Bangalore V. V. Gabriel

24 July 2012 Partner (M.No.213936)

---

Mar 31, 2011

We have audited the attached Balance Sheet of MESSRS.MAC CHARLES (INDIA) LIMITED ('the Company') as at 31 March 2011 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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, subject to Note No.20 of Schedule No. 19 - Notes on Accounts - regarding non-confirmation of balances;

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

(v) On the basis of written representations received from the Directors, 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 ;

(vi) 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 :

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

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

(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS'REPORT DATED 28 JULY 2011

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed during such verification.

(c) Fixed Assets disposed off during the year were not substantial.

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

(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) The Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of stocks as compared to book records are not material and have been properly dealt with in the books of account.

(iii) (a) The Company has granted an unsecured loan to its wholly owned subsidiary. The maximum amount outstanding during the year was Rs.3,44,70,430/- and the year-end balance of the loan is Rs.3,25,98,614/-.

(b) Having regard to the fact that the loan granted to its wholly owned subsidiary is interest free and unsecured and also that no agreement/contract is entered into with the subsidiary, the terms and conditions of loan granted to the subsidiary are in our opinion prima facie not prejudicial to the interests of the Company.

(c) In the absence of an agreement/contract there is no stipulation as to repayment and as such paragraph 4(iii)(c ) of the order is not applicable to the Company in respect of repayment of the principal amount.

(d) Since there is no stipulation regarding repayment of principal, paragraph 4(iii)(d) of the order is not applicable to the Company in respect of overdue amount in excess of rupees one lakh.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, having regard to the company's explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining 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 inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us :

a) the particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said section have been so entered.

b) where each of such transaction is in excess of Rs.5/- Lakhs in respect of any party, we are unable to comment whether such transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time since such transactions are in respect of certain purchases for which comparable quotations are not available.

(vi) The Company has not accepted deposits to which the directives issued by Reserve Bank of India and provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder apply.

(vii) The Company has an internal audit system commensurate with its size and the nature of its business.

(viii) As informed to us, the Central Government has not prescribed maintenance of cost records under Section 209 (l)(d) of the Companies Act, 1956, for the Company.

(ix) (a) According to the records of the Company and the information and explanations given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, details of disputed statutory dues which has not been deposited in the case of Income Tax are given in the table below :

SI. Nature of Period to Which the Amount No. Dues Dispute relates in Rupees Forum where the Dispute is Pending Remarks

1 Income Tax A.Y. 1997-98 9,55,691 Honourable High Court of Karnataka The amount in dispute is adjusted by the Income Tax Department out of refund due to the Company

2 Income Tax A.Y. 2001-02 9,54,168 Honourable High Court of Karnataka The amount in dispute is adjusted by the Income Tax Department out of refund due to the Company

3 Income Tax A.Y. 2007-08 14,90,801 CIT (Appeals) - III The amount in dispute is adjusted by the Income Tax Department out of refund due to the Company

4 Income Tax A.Y. 2008-09 27,01,461 CIT (Appeals) - III -

(x) The Company has neither accumulated loss as at 31 March 2011 nor has it incurred any cash loss during the financial year ended on that date or in the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to financial institution or bank.

(xii) According to the information and explanations given to us, and records examined by us, during the year the company has not granted loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

(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) In our opinion and according to the information and explanations given to us, the Company has not obtained any term loan 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 report that no funds raised on short term basis have been used for long term investment by the Company.

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

(xix) The Company has not issued any debenture during the year.

(xx) The Company has not raised money by public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For K. B. Nambiar & Associates

Chartered Accountants

(Firm Regn. No. 002313S)

Bangalore V. V. Gabriel

28 July 2011 Partner (M.No.213936)

---

Mar 31, 2010

We have audited the attached Balance Sheet of MESSRS.MAC CHARLES (INDIA) LIMITED (the Company) as at 31 March 2010 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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, subject to Note No.21 of Schedule No. 19 - Notes on Accounts - regarding non-confirmation of balances ;

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

(v) On the basis of written representations received from the Directors, 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 ;

(vi) 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 :

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

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

(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT DATED 30 JUNE 2010

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed during such verification.

(c) Fixed Assets disposed off during the year were not substantial.

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

(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) The Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of stocks as compared to book records are not material and have been properly dealt with in the books of account.

(iii) (a) The Company has granted an unsecured loan to its wholly owned subsidiary. The maximum amount outstanding during the year was Rs.2,30,00,000/- and the year-end balance of the loan is Rs.2,30,00,000/-.

(b) Having regard to the fact that the loan granted to its wholly owned subsidiary is interest free and unsecured and also that no agreement/contract is entered into with the subsidiary, the terms and conditions of loan granted to the subsidiary are in our opinion prima facie not prejudicial to the interests of the Company.

(c) In the absence of an agreement/contract there is no stipulation as to repayment and as such paragraph 4(iii) (c ) of the order is not applicable to the Company in respect of repayment of the principal amount.

(d) Since there is no stipulation regarding repayment of principal, paragraph 4(iii)(d) of the order is not applicable to the Company in respect of overdue amount in excess of rupees one lakh.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, having regard to the Companies explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining 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 inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us :

a) the particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said section have been so entered.

b) where each of such transaction is in excess of Rs.5/- Lakhs in . respect of any party, we are unable to comment whether such transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time since such transactions are in respect of certain purchases for which comparable quotations are not available.

(vi) The Company has not accepted deposits to which the directives issued by Reserve Bank of India and provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder apply.

(vii) The Company has an internal audit system commensurate with its size and the nature of its business.

(viii) As informed to us, the Central Government has not prescribed maintenance of cost records under Section 209 (l)(d) of the Companies Act, 1956, for the Company.

(ix) (a) According to the records of the Company and the information and explanations given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, details of disputed statutory dues which has not been deposited in the case of Income Tax are given in the table below :

SI. Nature of Period to Which the Amount No. Dues Dispute relates in Rupees Forum where the Dispute is Pendin



1 Income Tax A.Y. 1997-98 9,55,691 Honourable High Courtof Karnataka

2 Income Tax A.Y.2001-02 9,54,168 Honourable High Court of Karnataka

3 Income Tax A.Y.2007-08 14,90,801 CIT (Appeals) - III

Sl. No. Remarks

1 Income Tax The amount in dispute is adjusted by the Inmcome Tax Department out of refund due to the Company

2 Income Tax The amount in dispute is adjusted by the Inmcome Tax Department out of refund due to the Company

3 Income Tax The amount in dispute is adjusted by the Inmcome Tax Department out of refund due to the Company

(x) The Company has neither accumulated loss as at 31 March 2010 nor has it incurred any cash loss during the financial year ended on that date or in the immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to financial institution or bank.

(xii) According to the information and explanations given to us, and records examined by us, during the year the company has not granted loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

(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) In our opinion and according to the information and explanations given to us, the Company has not obtained any term loan 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 report that no funds raised on short term basis have been used for long term investment by the Company.

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

(xix) The Company has not issued any debenture during the year.

(xx) The Company has not raised money by public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.



For K. B. Nambiar & Associates

Chartered Accountants

(Firm Regn. No. 002313S)

Bangalore V. V. Gabriel

30 June 2010 Partner (M.No.213936)