Auditor Report of TD Power Systems Ltd.

Mar 31, 2018

Report on the Standalone Financial Statements.

We have audited the accompanying standalone financial statements of TD Power Systems Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, Statement of Changes in Equity 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 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 and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance 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) specified under Section 133 of the Act.

This responsibility also includes the 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 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 control, 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.

Auditors’ 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 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.

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

Opinion

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

Emphasis of Matter

As stated in Note 52 no provision for impairment in the carrying value of investments is considered necessary by the management for the reasons stated therein.

Our opinion is not modified in respect of the above matter. Other Matters

Attention is invited to the following:

i. We did not audit the financial statements of Japan Branch included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs.2,752.49 lakhs as at 31st March, 2018 and total revenues of Rs.5,565.61 lakhs for the year ended on that date, as considered in the standalone financial statements. The financial statements of the Branch have been audited by the branch auditors whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of the Branch, is based solely on the report of such Branch Auditors.

ii. The comparative financial information of the company for the year ended 31st March, 2017 included in the standalone financial statements are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006, audited by the predecessor auditor who has given an unmodified opinion on those financial statements and have been restated by the company to comply with Ind AS. Adjustments to the said comparative financial information for the differences in Accounting Principles adopted by the Company on transition to the Ind AS have been audited by us.

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 of India in terms of section 143(11) of the Act, we give in the ‘Annexure A’ a statement on the matters specified in the paragraph 3 and 4 of the said Order, to the extent applicable.

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

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

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

c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow 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 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 financials 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 pending litigations on its financial position in its standalone financial statements, the impact if any on the final settlement of these litigations is not ascertainable at this stage - Refer Note No. 36 of alone financial statements;

ii. The Company has made provision as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivate contracts; and

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

I. In respect of its Property, plant and equipment:

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

(b) The Company has a programme of physical verification of Property, plant and equipment of the Company, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, there were no material discrepancies identified on such verification when compared with available records of the company, the minor discrepancies identified during physical verification have been properly dealt within the books of account.

(c) According to the information and explanations given to us and as per verification of the records of the Company, the title deeds of the immovable properties, are held in the name of the Company as at the balance sheet date.

II. The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.

III. According to the information and explanations given to us, the Company has granted unsecured loans to wholly owned foreign subsidiaries which are covered in the register maintained under section 189 of the Act.

a. The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company’s interest.

b. The schedule of repayment of principal and payment of interest has been stipulated, the interest and the loans are renewed on maturity.

c. There is no overdue amount remainingoutstandingas at the balance sheet date.

IV. In our opinion and according to the information and explanations given to us,the Company has complied with the provisions of the section 185 and 186 of the Act in respect of the investments made, loans granted. The Company has not given any guarantees and securities to directors.

V. According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. Accordingly, the provisions of paragraph 3(v) of the Order is not applicable.

VI. We have broadly reviewed the books of account and records maintained by the Company pursuant to the Rules made by the Central Government, for the maintenance of cost records under Section 148(1) of the Companies Act, 2013 and are ofthe opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

VII.

(a) According to the information and explanations given to us and as per our verification of the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including Provident fund, Employee’s State Insurance, Income Tax, Sales Tax, VAT, Custom Duty, Excise Duty, Service Tax, Value Added Tax, Cess and other statutory dues with the appropriate authorities during the year to the extent applicable. There are no arrears of undisputed statutory dues of a material nature outstanding as at the last day of the financial year for a period of more than six months from the date on which they became payable.

(b) According to the information and explanations given to us and as per our verification of the records of the Company, no disputed amounts of Income tax or sales tax or Goods and service tax or duty of custom or duty of excise or value added tax or cess have not been deposited with appropriate authorities as at 31st March 2018, except for the following:

Name of the Statute	Nature of the dues	Amount (Rs. In Lakhs)	Period (financial year) to which the amount relates to	Forum where dispute is pending
Income Tax Act,1961	Income Tax	15.80	2012-13	Commissioner of Income Tax (Appeals)

VIII According to the information and explanations given to us and as per our verification of the records of the Company, the Company has not defaulted in repayment of its dues to the banks and financial institution.

IX. According to the information and explanation given to us and as per our verification of records of the Company, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the provisions of paragraph 3(ix) of the Order is not applicable.

X. According to the information and explanations given to us and as per our verification of records of the Company, no material fraud either by the Company or on the Company by its officers and employees has been noticed or reported during the year.

XI. According to the information and explanations given to us and as per our verification of records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of the Section 197 read with Schedule V of the Act.

XII. In our opinion and according to the information 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 as per our verification of records of the Company, transactions with the related parties are in compliance with the sections 177 and 188 of the Act and details of such transactions have been disclosed in the standalone financial statements as required by the applicable Accounting Standards.

XIV. According to the information and explanations given to us and as per our verification of records of the Company, the Company has not made 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 as per our verification of records of the Company, the Company has not entered into non-cash transactions with the directors or persons connected with the directors. Accordingly, paragraph 3 (xv) of the Order is not applicable.

XVI. 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.

We have audited the internal financial controls over financial reporting of TD Power Systems Limited (“the Company”) as of 31 March 2018 in conjunction with our audit of the standalone Ind AS 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. 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.

Auditors’ 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”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 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 authorisations of management and directors of the company; and

3.) provide reasonable assurance regarding prevention or timely detection of unauthorised 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 including basis of allocating expenses to various projects 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 VARMA & VARMA

Chartered Accountants

FRN 004532S

K.P.SRINIVAS

Bangalore Partner

May 23, 2018 Membership No. 208520

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Mar 31, 2016

TO THE MEMBERS OF TD POWER SYSTEMS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of TD Power Systems Limited ("the Company") which comprise the Balance Sheet as at March 31, 2016, 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, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branch at Japan.

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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.

Other Matter

We did not audit the financial statements of Japan branch included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 536,716,932/- as at 31st March, 2016 and total revenues of Rs. 398,417,427/for the year ended on that date, as considered in the standalone financial statements. The financial statements of the branch has been audited by the branch auditors whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of the branch, is based solely on the report of such branch auditors

Our opinion is not modified in respect of this 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 of India in terms of Sub-Section(11) of Section 143 of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

c. The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d. 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 and with the returns received from the branch not visited by us.

e. 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.

f. On the basis of the written representations received from the directors as on March 31, 2016 taken on the record by the Board of Directors, none of the directors is disqualified as on that date from being appointed as a director in terms of Section 164(2) of the Act.

g. 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. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

h. With respect to 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 information and according to the explanations given to us,

i. The Company does not have any pending litigations which would impact its financial position; - Refer Note 37(a) 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 - Refer Note 37(b) to the financial statements.

iii. There were no amounts outstanding as on March 31, 2016 which was required to be transferred to the Investor Education and Protection Fund by the Company. - Refer Note 37(c ) to the financial statements.

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

b. The management during the year has physically verified all the fixed assets. We have been informed by the management that no material discrepancies were observed.

c. According to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company.

ii. Inventories have been physically verified during the year by the management. We have been informed by the management that no material discrepancies were observed.

iii. According to the information and explanations given to us, the Company has granted unsecured loans to its foreign subsidiaries.

a. According to the information and explanations given to us, the terms and conditions of the above loans are not prejudicial to the interests of the Company.

b. We have been informed that the schedule of repayment of principal and payment of interest has been stipulated and the same are being followed regularly.

c. According to the information and explanations given to us, no amount is overdue to be received from the subsidiary.

iv. The Company has not given any loans, guarantees or securities to directors during the year and accordingly the provisions of sections 185 of the Act are not applicable. In respect of loans given to foreign subsidiary, the provisions of section 186 of the Act have been complied with.

v. In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly, the provisions of paragraph 3(v) of the Order is not applicable.

vi. To the best of our knowledge and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of Sub-Section (1) of Section 148 of the Act for the products of the company. Accordingly, the provisions of clause 3(vi) of the said Order are not applicable.

vii. According to the information and explanations given to us and the records of the Company examined by us, the Company is generally regular in depositing undisputed statutory dues applicable to it with the appropriate authorities. In terms of its books of account, no undisputed statutory dues payable in respect of provident fund, employees'' state insurance, income tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and any other statutory dues were outstanding, as at March 31, 2016 for a period of more than six months from the date they became payable.

According to the records of the Company and according to the information and explanations given to us, there were no dues outstanding on account of income tax, service tax, sales tax, customs duty, excise duty on account of dispute.

viii. According to the information and explanations given to us, the Company has not taken any term loans from financial institution, banks, Government or issued debentures, hence provisions of clause 3 (viii) of the Order is not applicable.

ix. The Company has not raised any money during the year by way of initial public offer or further public offer or by way of term loans. Accordingly, the provision of paragraph 3(ix) of the Order is not applicable.

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

xi. According to the information and explanations given to us, managerial remuneration has been provided in accordance with the approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi company and accordingly, provisions of paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us, transactions during the year with related parties are in compliance with sections 188 of Act. Details of transactions with related parties 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 fully or partly convertible debentures during the year under review. Accordingly, the provision of the 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 transactions with directors or persons connected with him/her. Accordingly, the provision of the paragraph 3(xiv) of the Order is not applicable.

xvi. 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 TD Power Systems Limited ("the Company") as of March 31, 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 (the "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 Act.

Auditors'' 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 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 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 March 31, 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 issued by ICAI.

For B. K. RAMADHYANI & CO. LLP.

Chartered Accountants

Firm Registration No. 002878S/S200021

R. SATYANARAYANA MURTHI

Bangalore Partner

May 11, 2016 Membership No. 024248

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Mar 31, 2015

We have audited the accompanying standalone financial statements of TD Power Systems Limited ("The Company") which comprise the Balance Sheet as at March 31, 2015, 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, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company's branch at Japan.

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 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 judgements 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 a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 March 31, 2015, and its profit and its cash flows for the year ended on that date.

Other Matter

We did not audit the financial statements of Japan branch included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 30,34,52,773/- as at 31st March, 2015 and total revenues of Rs. 158,652,579/- for the year ended on that date, as considered in the standalone financial statements. The financial statements of the branch has been audited by the branch auditors whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of the branch, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

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 the Section 143(3) of the Act, we report that

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

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

c. The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d. 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 and with the returns received from the branch not visited by us.

e. 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.

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

g. With respect to 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 information and according to the explanations given to us

i. The Company does not have any pending litigations which would impact its financial position; - Refer Note 37(a) 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 - Refer Note 37(b) to the financial statements.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. - Refer Note 37(c) to the financial statements.

ANNEXURE TO AUDITORS' REPORT

(As referred to in paragraph 1 of Report on other legal and regulatory requirements of our report to the members of TD Power Systems Limited)

1. a. The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed asset.

b. The management during the year has physically verified all the fixed assets. We have been informed by the management that no material discrepancies were observed and the programme of such verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its fixed assets.

2. a. Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. The procedure 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 inventory. The discrepancies noticed on verification between physical stocks and the book records were not material.

3. The Company has not granted any loans from the companies covered in the register maintained under Section 189 of the Act, hence clause 3(iii) of the Order is not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, no continuing failure to correct major weakness in the internal controls has been noticed.

5. The Company has not accepted any deposits as applicable under the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other provisions of the Act and Rules framed under. Accordingly, the provisions of clause 3(v) of the said Order are not applicable.

6. To the best of our knowledge and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of Sub-Section (1) of Section 148 of the Act for the products of the company. Accordingly, the provisions of clause 3(vi) of the said Order are not applicable.

7. According to the information and explanations given to us and the records of the Company examined by us, the Company is generally regular in depositing undisputed statutory dues applicable to it with the appropriate authorities. In terms of its books of account, no undisputed statutory dues payable in respect of provident fund, employees' state insurance, income tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and any other undisputed statutory dues were outstanding, as at March 31, 2015 for a period of more than six months from the date they became payable. According to the records of the Company and according to the information and explanations given to us, there were no dues outstanding on account of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess on account of dispute.

As per the records maintained by the Company, there is no amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and Rules made thereunder.

8. There are no accumulated losses of the Company at March 31, 2015. The Company has not incurred any cash losses in the current year as well as in immediately preceding financial year.

9. The Company has not taken any loans from financial institutions, banks or issued debentures, hence provisions of clause 3(ix) of the Order is not applicable.

10. In our opinion, the Company had not given any guarantees for loans taken by other companies, hence provisions of Clause 3(x) of the Order is not applicable.

11. No term loans were availed by the Company during the year and accordingly the provisions of clause3(xi) of the said Order are not applicable.

12. Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given to us, we report that no frauds on or by the Company during the year has been noticed or reported.

For B. K. RAMADHYANI & CO. LLP. Chartered Accountants Firm Registration No. 002878S/S200021

R. SATYANARAYANA MURTHI Bangalore Partner May 20, 2015 Membership No. 024248

---

Mar 31, 2014

Report on the Financial Statements:

We have audited the accompanying financial statements of TD Power Systems Limited ("the Company") which comprise of Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, and a summary of accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards notified under the Companies Act, 1956 ("The Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

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

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

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

Opinion:

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

i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014

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

iii In case of 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 Companies Act, 1956 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, the Company has kept proper books of account as required by Law so far as appears from our examination of those books (and proper returns adequate for the purposes of our audit have been received from branches not audited by us).

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 (and with the returns received from branches not audited by us).

d In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the accounting standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13, September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e On the basis of written representations received from Directors as on March 31, 2014 and taken on record by the Board of Directors we report that none of the Directors of the Company, are disqualified as on that date from being appointed as a director, under clause (g) of sub-section (1) of section 274 of the Act.

f Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Other Matters:

The report on the accounts of the Japan branch office (not audited by us) audited by Mr. Mitsuo Sekino, Certified Public Accountant (Japan), has been forwarded to us and has been dealt with in the manner considered appropriate by us while preparing our report. Our report is not qualified in respect of this matter.

1 a The Company has maintained proper records showing full particulars including quantitative details, situation of fixed assets in the fixed asset register.

b According to the information and explanations given to us, there is a physical verification programme being done in a phased manner and at reasonable intervals. We are also informed that the Company has carried out the physical verification of fixed assets during the period of review as per the scheme of physical verification regularly followed. We are informed that no material discrepancies were noticed on such verification which needs an adjustment in the financial statements.

c During the year, there has been no significant sale/disposal of fixed assets.

2 a Inventory was physically verified during the year by the management. In our opinion, the frequency of such verification is reasonable.

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

c According to the information and explanations given to us, proper records of inventories are maintained and no material discrepancies are noticed during such physical verification.

3 The company has not granted nor taken loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act and accordingly, clause (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Order are not applicable.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets; and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5 a In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered in the register maintained.

b According to the Company, the transactions made in pursuance of such contracts or arrangements and exceeding value of Rs. 5 Lakhs with any party during the year have been made prices which are reasonable having regard to prevailing market prices at the relevant time.

6 The company has not accepted any deposits from public; hence in our opinion the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules made there under are not applicable. According to the company, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8 To the best of our knowledge and according to the information given to us, the Central Government has prescribed the maintenance of cost records under section 209(1) (d) of the Act for the products of the Company. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records U/s 209 (1) (d) of the Act and we are of the opinion that prima facie, the records have been maintained. We have not done detailed examination of records with a view to determining whether they are accurate and complete

9 a According to information and explanation given to us, the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, wealth tax, sales tax, custom duty, service tax, cess and other applicable statutory dues with the appropriate authorities. There are no arrears of outstanding statutory dues as at March 31, 2014 for a period exceeding six months. Further, short/non deduction of withholding tax has not been reckoned for this purpose.

b According to information and explanations given to us, there are no outstanding disputed amount payable on account of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess other than on account of Income Tax deduction of salaries raised by the department as referred to Note 19 to Financial Statements which is under process for rectification by the department.

10 The company has no accumulated losses as on March 31, 2014. The company has not incurred cash losses during the current year or during the previous year.

11 In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to bank. The Company has not taken any loan from financial institutions and also has not issued any debentures.

12 According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and accordingly, the provisions of paragraph 4 (xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

13 In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society and accordingly, provisions of paragraph 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

14 In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of paragraph 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

15 The Company has given corporate guarantee of Rs.100 Crores, Rs. 162 crores and Rs. 292 crores in respect of facilities availed by its subsidiary M/s. DF Power Systems Private Limited to the bankers M/s. Standard Chartered Bank, M/s. ICICI Bank Limited and M/s. Bank of Baroda. The terms and conditions of the guarantee are not prima facie prejudicial to the interest of the Company.

16 The Company has not obtained any term loans during the year from the Company''s bankers. Accordingly, the provisions of paragraph 4 (xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

17 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 purposes. No long- term funds have been used to finance short-term assets except permanent working capital.

18 According to the information and explanations given to us, there was no issue of shares or other securities during the year and accordingly provisions of paragraph 4 (xviii) of the Companies (Auditor''s Report) Order, 2003 regarding preferential allotment are not applicable.

19 According to the information and explanations given to us, there are no debentures issued by the company during the year and accordingly, provisions of clause 4 (xix) of the Companies (Auditor''s Report) Order, 2003 regarding creation of securities are not applicable.

20 There was no public issue of capital, debenture, etc during the year and accordingly, provisions of paragraph 4 (xx) of the Companies (Auditor''s Report) Order, 2003 regarding end use of money are not applicable.

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

For B. K. Ramadhyani & Co.,

Chartered Accountants

Firm Registration No. 002878S

R. Satyanarayana Murthi

Bangalore Partner

May 21, 2014 Membership No. 024248

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of TD Power Systems Limited ("the Company") which comprise of Balance Sheet as at March 31,2013, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, and a summary of accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that 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, includingthe 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 knowledge and according to the information and explanations given to us, the said financial statements give the information required by the Act in the manner so required; give a true and fair view in conformity with the accounting principles generally accepted in India:

in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013, in the case of Statement of Profit and Loss, of the profit for the year ended on that date, and in the case of 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 (Auditors'' 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 Companies Act, 1956, 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, the Company has kept proper books of account as required by Law so far as appears from our examination of those books (and proper returns adequate for the purposes of our audit have been received from branches not audited by us).

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 (and with the returns received from branches not audited by us).

d. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply in all material respects, with the mandatory Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

e. On the basis of written representations received from Directors as on March 31, 2013 and taken on record by the Board of Directors, we report that none of the Directors of the Company, are disqualified as on that date from being appointed as a director, under clause (g) of sub-section (1) of section 274 of the Act.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Other Matters

The report on the accounts of the Japan branch office (not audited by us) audited by Mr. Mitsuo Sekino, Certified Public Accountant (Japan), has been forwarded to us and has been dealt with in the manner considered appropriate by us while preparing our report. Our report is not qualified in respect of this matter.

ANNEXURE TO AUDITORS'' REPORT

(As referred to in paragraph 1 of report on other legal and regulatory requirements of our report to the members of TD Power Systems Limited)

1. a. The Company has maintained proper records showing full particulars including quantitative details, situation of fixed assets in the fixed asset register.

b. According to the information and explanations given to us, there is a physical verification programme being done in a phased manner and at reasonable intervals. We are also informed that the Company has carried out the physical verification of fixed assets during the period of review as per the scheme of physical verification regularly followed. We are informed that no material discrepancies were noticed on such verification which needs an adjustment in the financial statements.

c. During the year, there has been no significant sale/disposal of fixed assets.

2. a. Inventory was physically verified during the year by management. In our opinion the frequency of such verification is reasonable.

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

c. According to the information and explanations given to us, proper records of Inventories are maintained and no material discrepancies are noticed during such physical verification.

3. The company has not granted nor taken loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act and accordingly, clause (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets; and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. a. In our opinion and according to the information and explanations given to a us, the transactions made in pursuance

of contract or arrangements to be entered in the register maintained under section 301 of the Companies Act, 1956, have been so entered in the register maintained.

b. According to the Company, the transactions made in pursuance of such contracts or arrangements and exceeding value of Rs. 5 Lakhs 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.

6. The company has not accepted any deposits from public; hence in our opinion the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules made there under are not applicable. According to the company, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. To the best of our knowledge and according to the information given to us, the Central Government has prescribed the maintenance of cost records under section 209(1) (d) of the Act for the products of the Company. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records u/s 209(1) (d) of the Act and we are of the opinion that prima facie, the records have been maintained. We have not done detailed examination of records with a view to determining whether they are accurate and complete.

9. a. According to information and explanation given to us, the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, wealth tax, sales tax, custom duty, service tax, cess and other applicable statutory dues with the appropriate authorities. There are no arrears of outstanding statutory dues as at March 31, 2013, for a period exceeding six months. Further, short/non deduction of withholding tax has not been reckoned for this purpose.

b. According to information and explanations given to us, there are no outstanding disputed amount payable on account of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess other than on account of Income Tax deduction of salaries raised by the department as referred to Note 19 to Financial Statements which is under process for rectification by the department.

10. The company has no accumulated losses as on March 31,2013. The company has not incurred cash losses during the current year or during the previous year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to bank. The Company has not taken any loan from financial institutions and also has not issued any debentures.

12. According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and accordingly, the provisions of paragraph 4(xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

13. In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society and accordingly, provisions of paragraph 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

14. In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of paragraph 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are notapplicable to the company.

15. The Company has given corporate guarantee of Rs. 100 Crores, Rs. 162 Crores and Rs. 292 Crores in respect of facilities availed by its subsidiary M/s. DF Power Systems Private Limited to the bankers M/s. Standard Chartered Bank, M/s. ICICI Bank Limited and M/s. Bank of Baroda. The terms and conditions of the guarantee are not prima facie prejudicial to the interest of the Company.

16. The Company has not obtained any term loans during the year from the Company''s bankers. Accordingly, the provisions of paragraph 4(xvi) of the Companies (Auditor''s Report) Order, 2003 are notapplicable to the company.

17. 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 purposes. No long-term funds have been used to finance short-term assets except permanent working capital.

18. According to the information and explanations given to us, there was no issue of shares or other securities during the year and accordingly provisions of paragraph 4(xviii) of the Companies (Auditor''s Report) Order, 2003 regarding preferential allotment are not applicable.

19. According to the information and explanations given to us, there are no debentures issued by the company during the year and accordingly, provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 regarding creation of securities are not applicable.

20. There was no public issue of capital, debenture, etc during the year and accordingly, provisions of paragraph 4(xx) of the Companies (Auditor''s Report) Order, 2003 regarding end use of money are not applicable.

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



For B. K. Ramadhyani & Co.,

Chartered Accountants

Firm Registration No. 002878S

R Satyanarayana Murthi

Bangalore Partner

May 22, 2013 Membership No. 024248

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of TD Power Systems Limited as at 31st March 2011 and Profit and Loss Account and also the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. Without qualifying, reference is drawn to Note 20, Schedule M in respect of the remuneration payable to the Directors, which is subject to approval of the Shareholders.

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

5. Further to our comment in Para ix (b) of the Annexure referred to in paragraph 4 above, we report that:

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

b. In our opinion, proper books of accounts as required by law have been kept by the Company, so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branch not visited by us;

c. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account. and with the returns from tire branches;

d. In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable;

e. On the basis of written representations received from, the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st 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.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31.3.2011;

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

Referred to in paragraph 3 of the Auditor's Report

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

b. Physical verification of fixed assets is being done on a phased manner and is in reasonable intervals. According to the information furnished, no material discrepancies have been observed in such verification.

c. There has been no disposal of substantial part of fixed assets during the year;

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

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

(iii) The company has not granted/taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. For this purposes the transactions with the Subsidiary Company is in the nature of current account transaction and not considered as loan and accordingly, clause (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the Order are not applicable;

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control "procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements to be entered in the register maintained under section 301 of the Companies Act, 1956, have been so entered in the register maintained.

b. According to the Company, the transactions made in pursuance of such contracts or arrangements and exceeding value of rupees Five Lakhs 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.

(vi) The Company has not accepted any deposits from public, hence in our opinion the provisions of. Section 58A and 58'AA of the Companies Act, 1956 and the rules made there under are not applicable. According to the Company, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal

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

(viii) As explained to us, the Company has maintained cost records under Section 209(1) (d) of the Companies Act, 1956. However we have not made a detailed examination of the records.

(ix) a. According to information and explanation 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, wealth tax sales tax, custom duty, service tax, customs duty, excise duty, cess and other statutory dues to the appropriate authorities. Cess payable under section 441A of the Companies Act, 1956 has not been notified. Consequently, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. Further, short/non deduction of withholding tax has not been reckoned for this purpose.

b. There are no outstanding disputed amount payable on account of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess. However, according to information and explanations given to us on account of short deduction/short payment in respect of withholding tax as per Income Tax Act 1961, as referred to Note 22, Schedule M to Financial statements, there is no disputed tax liability as the demand raised by the Department is under rectification/appeal.

(x) The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses during the current year or during the previous year.

(xi) In our opinion and according to the information and explanations given to us, the company has, not defaulted in the repayment of dues to bank. The Company has not taken any loan from Financial institutions and also has not issued any debentures.

(xii) According to the information and explanations given to us and the documents and records produced before us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

(xiii) In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore paragraph 4(xiii) of the Order is not applicable to the Company.

(xiv) In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) The Company has given corporate guarantee of Rs.87 crores and Rs. 297 crores in respect of facilities availed by its subsidiary M/s DF Power Systems Private Limited to the bankers M/s ICICI Bank Limited and M/s Bank of Baroda. The terms and conditions of the guarantee are not prima facie prejudicial to the interest of the Company.

(xvi) The Company has not obtained term loans' during the year under review.

(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 purposes. No long term funds have been used to finance short-term assets except permanent working capital.

(xviii) According to the information and explanations given to us, the issue of shares to parties covered in. the Register maintained under Section 301 of the Act during the year and the price charged therefore are not prejudicial to the interests of the company.

(xix) According to the information and explanations given to us, there are no debentures issued by the company during the year and hence paragraph 4(xix) of the Order regarding the creation of securities is not applicable.

(xx) During the year the company has not raised money by way of public issue of capital, debentures, etc and hence, paragraph 4(xx) of the Order regarding the end use of money is not applicable.

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

For B. K. Ramadhyani & Co.,

Chartered Accountants

FRN No:002878S

R Salyanajrayana Murthi

Partner

Membership No. 024248

B.K.Ramadhyarii & Co

Chartered Accountants

4B, Chitrapur Bhavan 8th Main, 15th Cross, Malleswaram BANGALORE-560 055

Date: 30th May 2011