Bee Electronic Machines Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2014

We have audited the accompanying financial statements of Bee Electronic Machines Limited, which comprise of the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss, Cash Flow Statement for the year then ended and a summary Of significant accounting policies and other explanatory information.

Management's Responsibility tor the Financial Statements

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

Auditor's Responsibility .

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement 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, foe financial statements give the information required by the Act lit the manner so required subject to the following:

Clause 1 regarding non-provision of gratuity, leave travel assistance, Leave encashment and Medical reimbursement, amount being unascertained;

Clause.2 (a) regarding non-provtsion of excise duty on Finished goods of Rs.196,892 being accounted for on clearance basis;

Clause No 2(b) Non provision of interest on Excise duty payable of Rs 48,300 (pp to PY Rs 483,000)

Clause No 2(C) Non provision of property tax of Rs 67,751 (up to PYRs 630,418)

Clause No. 4(b) regarding disclosure of overdue debentures die to this, the seemed loan is overstated by Rs 131.25 lacs.

Clause No 4(d) regarding non-provision of interest on debentures of Rs 18.75 lacs Clause No 4(e) regarding non-provision of interest on premium payable of Rs 93,750/-

Clause No 5 regarding unconfirmed balance of debtors, creditors, loans, advances and secured loans from financial Institutions and Bankers: *

Clause No. 6 regarding non-provision of loans and advances of Rs. 581,279;

Clause No 7 (b) regarding non-provision of interest of Rs 171.88 lacs:

Clause No 8 regarding non-provision of loss of Rs 400 lacs approximately on obsolete and slow moving stocks:

2. We further inform that without considering the items mentioned for clause no 1, 4 (b) and 5 of notes to the accounts, effect of which cannot be determined, had the observations been made by us in clause nos. 2(b), 2(c), 4(d); -4(e), 6, 7(b) and 8 of the note to the accounts been considered, the loss for the year would have been Rs. 6,08,52,542/- as against the reported loss figure of Rs 998,287/- and the accumulated loss would have been Rs 18,41,10,346 as against the reported figure of Rs.12,42,56,091 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 Profit and Loss Account of the loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 fthe 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 for the purposes of our audit

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

d) in our opinion, the Balance Sheet Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to In subsection (3C) of section 211 of the Companies Act, 1956;

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 are disqualified as on March 31. 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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.

a.Based on the information and explanation give to use ,we are of the opoion that the transaction that are meSon to be eentered in the resiter in poersonl of section 301 of the company Act.1956 have been entered.

0.5 b. In our opion and accounding to the information and edmplation ot the there werre the transactioon were made in prcodes of contracts entered in the segister mainatianed under section 301 of the compaines 1956 in respect of any party during the year.

0.5 the company has not accepted andy deposited from public the provision of section 58 A abd 58 of the Companies Act and the sales financial there under are not applicable

06.in our ipionion, the company has an incidental audit system corporate with fine size and nature of as business however it needs to the strictures

07. to ear gpirioau *a Qaapacy to« aw Mfemal aarii do*— inaamynurriB adh toe atea and natae of to business.

08. Weare infomM that tiie Central Government has not prescribed the maintenance of cost records under section 209(1)

(d) of tiie Companies Act, 1956 for any ot the product of the company.

9.1 .Acconfingto information furnished to us, tt» company is regular fa depositing with appropriate authorities, the undisputed statutory dues Inducting Provident Fund, Investor Education Protection Fund, and Employees State Insurance, Income Tax. Sales Tax. Service tax. Wealth Tax, Custom Duty. Excise Duty, Cess and other material statutory dues applicable to * and there were no unctispuled statutory dues in arrears, as at the date of the Balance Sheet under report, for a " period of mote than six months from the datethey became payable except Sales tax of Rs318,793f-, service tax of Rs 24,663 profession tax Rs 7.7687-, and Excise duty Rs 322.00/-

9.2. Aocordfog loiwinfoimatfon famished to us, mefoeowing amounts of Beqise Duty and Sales Thx, have been, disputed . try the Company, and hence, were not doposhed to the concerned authorities at date of the Bafonce Sheet under report.

Name of Nature of Amount Period to status due which the amount related

Central Excise act, 1944 Excise duly 4,34,19,414 1991 to 1994

Central Excise act 1944 Excise duly 7479.179 1993 to 1997

Sales tax Act Sales tax 1,349,432 1997-98

Sales tax Act Sales tax 1,302,000 1998-99

Sales tax Act Sales tax 823,772 1999-00

Sales tax Act CST 91,115 1999-00

Sales tax Act Sales tax 49489 1998-98

Sales tax Act CST 58447 1998-43

Sales tax Act Sales tax 42,997 1990-2000

Sales tax Act Sales tax 99,211 1999-2000

Sales tax Act CST 104,8442 1999-2000

Sales tax Act CST 97481 2001-2002

Name of Forum where the status dispute is pending

Central Excise act, 1944 CESTHT

Central Excise act 1944 CESTHT

Sales tax Act Gujarat sales Tax Tribunal Ahmedabed

Sales tax Act Gujarat sales Tax Tribunal Ahmedabed

Sales tax Act Gujarat sales Tax Tribunal Ahmedabed

Sales tax Act Asst Commissioner of sales Tax (Appeal 1). Ahmedabed

Sales tax Act By Commissioner -Cmaaertiti tores. Kolikata. (South) circle

Sales tax Act By Commissioner - Coneaetdti tores. Kolikata. (South) circle

Sales tax Act By Commissioner - Ccnensrclsl toss. Kolikata (South) circle

Sales tax Act By Commissioner (CT) AppeOtie Secunderabad Div

Sales tax Act By Commissioner (CT). Appeiete Secunderabad div

Sales tax Act The Joint Commissioner-6. Trade tax Lucknow

10. Aootmting to tho informaion and saplanafions famished to us

a) It has accumuitied tosses at tiie end of the tinandaf year of Rs 12,42.56,091

b) Outing Are year ire company has incurred a cash toss of Rs 585444 and in Vie bnmectiately preceding financial year company had incurred a toss of Rs 3884557-.

11. In our opinion and aooonting to the information and explanations famished to us by the Company, there were defaults la mpayarent of 8s dues to faiandal institutions and banks at the date of tire Balance Sheet and the company has cfafaabBd fet repayment of dues of Rs 4215.16 lacs to ihe financial institutions and banks. (Inducting Rs 3030.65 lacs un- presided Merest accnred 8 due)

12. According to the information and explanation given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not chit fund, nidhi, mutual benefit fond or a society. Accordingly, the provisions of clause 4 (xiii) of the Order, is not applicable to the company.

14. According to the information and explanation given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, clause (xiv) of .the order is not applicable to the company.

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

16. The Company has not taken any term loan during the year.

17. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised during the year on short - term basis have been used for long - term investment.

18. The Company has not made any preferential alfotmeet of shares to parties and companies covered in the register maintained under section 301 of the Act Accordingly, the provisions of clause 4 (xviii) of the order are not applicable to the company.

19. The Company has not issued any debentures during the year. However, the company had taken money from UTI for issuing debentures of Rs 125 lacs in the year 1991 for which securities are yet to be created.

20. The Company has not raised any money from the public Issue during the year

21. During the course of our examination of the accounts of toe Company in accordance with generally accepted auditing practices, we have not come across any instances of fraud on or by the Company, nor have we been informed by the! management, of any such instance being noticed or reported during the year.

For SHANKARLAL JAIN & ASSOCIATES Chartered Accountants Place: Mumbai Firm Reg. No.109901 W Date : 30th May, 2014 S.L. AGRAWAL (PARTNER) Membership No. 72184

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Mar 31, 2012

We have audited the attached Balance Sheet of Bee Electronic Machines Limited as at 31st March, 2012 and also the annexed Profit and Loss Account and the Cash flow statement of the Company for the year ended on that date annexed thereto. These financial statements are responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conduct our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan & 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) order, 2003 issued by Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the specified in paragraph 4 and 5 of the said order to the extent applicable to the Company.

2. Further to our comments referred to in paragraph (1) 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 purpose of the audit:

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

c) The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of accounts:

d) In our opinion, the attached balance Sheet, profit and loss account and the cash flow statement comply with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956, except AS-15, regarding non provision of gratuity and leave encashment, being, accounted for on cash basis, amount unascertained as referred in clause no. 1, and AS-2 regarding valuation of inventories as referred to Clause no 8 of notes to the accounts.

e) On the basis of the written representation received from all the directors as on 31.03.2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31.03.2012 from being appointed as directors 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 accounts read with other notes to accounts, subject to the following;

Clause 1 regarding non-provision of gratuity, leave travel assistance, Leave encashment and Medical reimbursement, amount being unascertained;

Clause 2 (a) regarding non-provision of excise duty on finished goods of Rs. 196,892 being accounted for on

clearance basis;

Clause No. 2(b) A/on provision of interest on Excise duty payable of Rs. 48,300 (up to PY Rs. 338,100)

Clause No. 2(c) Non provision of property tax of Rs. 67,751 (up to PY Rs. 427,165)

Clause No. 4(b) regarding disclosure of overdue debentures due to this, the secured loan is overstated by Rs. 131.25 lacs.

Clause No. 4(d) regarding non-provision of interest on debentures of UTI of Rs. 18.75 lacs and writing back interest provided in books up to March 2005 amounting to Rs. 138.70 lacs

Clause No. 4(e) regarding non-provision of interest on premium payable of Rs. 93,750/-

Clause No. 5 regarding unconfirmed balance of debtors, creditors, loans, advances and secured loans from financial Institutions and Bankers;

Clause No. 6 regarding non-provision of loans and advances of Rs. 626,279;

Clause No. 7 (b) regarding non-provision of interest of Rs. 171.88 lacs; and writing back interest provided in books up to March 2005 of Rs. 1176.26 lacs

Clause No. 8 regarding non-provision of loss of Rs. 400 lacs approximately on obsolete and slow moving stocks;

3. We further inform that without considering the items mentioned for clause no 1, 4 (b) and 5 of notes to the accounts, effect of which cannot be determined, had the observations been made by us in clause nos. 2(b), 2(c), 4(d), 4(e), 6, 7(b) and 8 of the note to the accounts been considered, the loss for the year would have been Rs. 6,07,10,243/- as against the reported profit figure of Rs. 13,06,84,612/- and the accumulated loss would have been Rs. 31,38,51,261 as against the reported figure of Rs. 12,24,56,406 the information required by the Companies Act, 1956 in the manner so required, give a true and fair view:-

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

(2) in the case of the profit and loss account, of the profit of the Company for the year ended on that date:

(3) in the case of the cash flow statement, of the cash flows for the year ended on that date.

The Annexure referred to in the Auditors' Report to the Members of Bee Electronic Machines Limited for the year ended 31st March, 2012.

We report that:

1.1. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

1.2. According to the information and explanations furnished to us, the Company has not physically verified all the fixed assets during the year.

1.3. There were no fixed assets disposed off during the year and therefore do not affect the going concern status of the Company.

2.1. According to the information and explanations furnished to us, the Company has physically verified its inventories during the year. In our opinion, and the frequency of verification is reasonable.

2.2. In your opinion, the procedures of physically verification of inventories following by the management are reasonable and adequate In relation to the size of the Company and the nature of its business.

2.3 According to information furnished to us, the company is maintaining proper records of inventory and the discrepancies; if any noticed on verification between the physical stock and book records were not material and have been properly dealt with in the books of account.

3. According to the information and explanations furnished to us, the Company has taken interest free loans from companies, parties and director listed in the register maintained under section 301 of the Companies Act, 1956. Other terms and conditions are not prima facie prejudicial to the interest of the company. The company has not given any loans to companies, parties and director listed in the register maintained under section 301 of the Companies Act, 1956 or to company under same management within the meaning of section 370 (1-B) of the companies Act, 1956. Loan taken to the extent of Rs. 54, 61,000/- from one party

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, fixed assets and with regard to the sale of goods and services. Further during the course of our audit, we have not come across any instances of major weaknesses in internal control that in our opinion, require correction but have so continued without correction.

05 a. Based on the information and explanations given to us, we are of the opinion that the transactions that are needed to be entered in the register in pursuance of section 301 of the Company Act, 1956 have been entered.

05 b. In our opinion and according to the information and explanations given to us, there were no transactions which were made in pursuance of contracts entered in the register maintained under Section 301 of the Companies Act, 1956 in respect of any party during the year.

06. The Company has not accepted any deposits from public therefore, the provisions of sections 58 A and 58 AA of the Companies Act, and the rules framed thereunder are not applicable.

07. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. However, it needs to be strengthened.

08. We are informed that the Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 for any of the products of the company.

9.1 According to information furnished to us, the company is regular in depositing with appropriate authorities, the undisputed

statutory dues including Provident Fund, Investor Education Protection Fund, and Employees State Insurance, Income Tax, Sales Tax, Service tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it and there were no undisputed statutory dues in arrears, as at the date of the Balance Sheet under report, for a period of more than six months from the date they became payable except Sales tax of Rs. 3,18,793/-, service tax of Rs. 24,663 profession tax Rs. 7,768/-, and Excise duty Rs. 3,22,000/-

9.2 According to the information furnished to us, the following amounts of Excise Duty and Sales Tax, have been, disputed by the Company, and hence, were not deposited to the concerned authorities at date of the Balance Sheet under report.

Name of Statute Nature of Amount Period to dues which the amount relates

Central Excise Excise duty 4,34,16,614 1991 to 1994 Act, 1944

Central Excise Excise duty 7,476,179 1983 to 1987 Act, 1944

Sales Tax Act Sales tax 1,349,432 1997-98

Sales Tax Act Sales tax 1,303,600 1998-99

Sales Tax Act Sales tax 923,772 1999-00

Sales Tax Act CST 31,115 1999-00

Sales Tax Act Sales tax 43,688 1992-93

Sales Tax Act CST 58,547 1992-93

Sales Tax Act Sales tax 42,697 1999-2000

Sales Tax Act Sales tax 66,211 1999-2000

Sales Tax Act CST 104,942 1999-2000

Sales Tax Act CST 97,381 2001-2002



Name of Statute Forum where the dispute Is pending

Central Excise CESTAT Act, 1944

Central Excise CESTAT Act, 1944

Sales Tax Act Gujarat Sales Tax Tribunal Ahmedabad

Sales Tax Act Gujarat Sales Tax Tribunal Ahmedabad

Sales Tax Act Gujarat Sales Tax Tribunal Ahmedabad

Sales Tax Act Asst Commissioner of sales Tax (Appeal 1), Ahmedabad

Sales Tax Act Dy Commissioner - Commercial taxes, Kolkata, (South) circle

Sales Tax Act Dy Commissioner - Commercial taxes, Kolkata, (South) circle

Sales Tax Act Dy Commissioner - Commercial taxes, Kolkata, (South) circle

Sales Tax Act Dy Commissioner (CT)-Appellate Secunderabad Div

Sales Tax Act Dy Commissioner (CT)- Appellate Secunderabad Div

Sales Tax Act The Joint Commissioner (Appeal) - 6, Trade tax Lucknow

10. According to the information and explanations furnished to us

a) It has accumulated losses at the end of the financial year of Rs. 12,24,56,406

b) Neither during the year the company has not incurred any cash loss nor in the immediately preceding financial year.

11. In our opinion and according to the information and explanations furnished to us by the Company, there were defaults in repayment of its dues to financial institutions and banks at the date of the Balance Sheet and the company has defaulted in repayment of dues of Rs. 3,138.51 lacs to the financial institutions and banks. (Including Rs. 1,913.95 lacs un-provided interest accrued & due)

12. According to the information and explanation given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14. According to the information and explanation given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, clause (xiv) of the order is not applicable to the company.

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

16. The Company has not taken any term loan during the year.

17. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised during the year on short - term basis have been used for long - term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4 (xviii) of the order are not applicable to the company.

19. The Company has not issued any debentures during the year. However, the company had taken money from UTI for issuing debentures of Rs. 125 lacs in the year 1991 for which securities are yet to be created.

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

21. During the course of our examination of the accounts of the Company in accordance with generally accepted auditing practices, we have not come across any instances of fraud on or by the Company, nor have we been informed by the management, of any such instance being noticed or reported during the year.

For SHANKARLAL JAIN AND ASSOCIATES Chartered Accountants Firm Registration Number 109901W

Sd/-

S. L. Agrawal Partner Membership No. 72184

Place : Mumbai Date: June 8, 2012

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Mar 31, 2010

We have audited the attached Balance Sheet of Bee Electronic Machines Limited as at 31stMarch, 2010 and also the annexed Profit and Loss Account and the Cash flow statement of the Company for the year ended on that date annexed thereto. These financial statements are reaponsibllity of the Companys Management Our rasponsibillity Is to express an opinion on these financial statements baaed on our audit

We conduct our audi in accordance with auditing starxiards generally accepted in India. Those standards requite & perform the audit to obtain reasonable assurance about whether, the financial statements are free of material misstatement An audit includes exarrrintog, on a test basis, evidema supporting audit also Includes assessing the accounting principles used and significant estimates made by the Management, as welt as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) order, 2009 issued by Central Govermment of India In terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the specified in paragraph 4 and 5 of the said order to the extent applicable to the Company.

2. Further to our comments referred to In paragraph (1) 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 purpose of the audit

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

c) The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of accounts:

d) in our opinion, the attached balance Sheet, profit and loss account and the cash flow statement comply with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956, except AS-15, regarding non provision of gratuity and have encashment, being, accounted for on cash basis, amount unascertained as referred In note No. 3, and AS-2 regarding valuation of Inventories as referred, to note no 10 of notes to the accounts.

e) On the basis of the written representation received from all the directors as on 31.03.2010 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31.03.2010 from being appointed as directors 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 accounts read with other notes of schedule, subject to the following;

Note No. 1A regarding non-provision of gratuity, leave travel assistance, Leave encashment and Medical reimbursement, amount being unascertained;

Note No. 4 regarding non-provision of excise duty on finished goods of Rs.1,64,076 being accounted for on clearance basis;

Note No 4(b)Non provision of Intension Excise duty payable of Rs 48,300 (upto PY Rs 289,800}

Note No 4(c) Non provision of property tax of Rs 67.751(upto PY Rs 359,414}

Note No. 8 (b) regarding disclosure of overdue debentures due to this, the secured loan ls overstated by Rs 269.95 lacs.

Note no 6 (c) regarding non-provision of Interest on debentures of UTI of Rs 18.75 lacs & non-provision of Penal interest on overdue amount Amount being unascertained

Note no 6 (d) regarding non-provision of interest on premium payable of Rs 93,750

Note No. 7 regarding unconfirmed balance of debtors, creditors, loans, advances and secured loans from financial institutions and Bankers;

Note No.8 regarding non-provision of loans and advances of Rs. 6,11,279;

Note No 9 regarding non-provision of interest of Rs 171.88 lacs; penal Interest of Rs. 21.07 lacs and Interest on interest accrued and due of Rs. 406.65 lacs approximately, Accumulated non-provision of Interest Rs 3432.03 lacs:

Note No. 10 regarding non-provision of loss of Rs 400 lacs approximately on obsolete and slow moving stocks;

3. We further inform that without considering the items mentioned for Note 1A, 6(b) and 7 of notes to the accounts, effect of which cannot be determined, had the observations been, made by us in Note No. 4(b), 4(c), 6(c), 6(d), 8, 9(a), 9(b), 9(c) and 10 of the note to the accounts been considered, the loss for the year would have been Rs. 10,47,87,057 as against the reported loss figure of Rs 21,30,977 and (he accumulated loss would have been Rs 35,44,17,112 as against the reported figure of Rs.25,17,61,032 the information required by the Companies Act, 1956 in the manner so required, give a true and fair view.

(1) in the case of balance Sheet, of the state of affairs of theCompany as at 31st March, 2010:

(2) in the case of. the profit and loss account, of the loss of the Company for the year ended on that date:

(3) in the case of the cash flow statement, of the cash flows for the year ended on that date.

The Annexure referred to In the Auditors Report to the Members of Bee Electronic Machines Limited for the year ended 31 March 2010.

We report that:

1.1. The company has maintained proper records showing full partkxilars including quantitative detalis and slluation of faced assets.

1.2. According to the information and explanations furnished to us, the Company has not phyrsically verified all the fixed assets during the year.

1.3. There were no fixed assets disposed off during the year and therefore do not affect the going concern status of the Company.

2.1. According to the information and explanations furnished to us, the Company has physically verified the year. In our opinion, and the frequency of verification is reasonable.

2.2. In your opinion, the procedures of physically verification of Inventories following by the management are reasonable and adequate In relation to the size of the Company and the nature of its business.

2.3 According to information furnished to us, the company is maintaining proper records of inventory and the discrepancies; if any noticed on verification between the physical stock and book records were not material and have been properly dealt with in the books of account

3. According to the Information and explanations furnished to us, the Company has taken interest free loans from companies, parties and director listed In the register maintained under section 301 of the Companies Act, 1956. Other terms and conditions are not prima facie prejudicial to the.interest of the company. The company has not given any loans to companies, parties and director listed in the register maintained under section 301 of the Companies Act, 1956 or to company under same management within the meaningofsecllon 370(1-B)of the companies Act,1956.Loantakentothe extent of Rs 39,51,277 from 4 parties

4. In our opinion and according to the information and explanations given to us, there are adequate internal control proce-dures commensurate with the size of the company and the nature of as business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. Further during the course of our audit, we have not come across any instances of major weaknesses in internal control that in our opinion, requite correction but have so continued without correction.

05 a. Based on me information and exptanatiora given to us, we are to be entered In the register In pursuance of section 301 of the Company Act, 1956 have been entered.

05 b. In our opinion and according to the information and expianations given to us, there ware no transactions which were made in pursuance of contracts entered in the register maintained under Section 301 of the Companies Act, 1956 In respect of any party during the year.

06. The Company has not accepted any deposits from public therefore, the provisions of sections 58 A and 58 AA of the Companies Act. and the rules framed thereunder are not applicable.

07. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. However, it needs to be strengthened.

08. We are informed that the Cental Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 for any of the products of the company.

9.1. According to information furnished to us, the company is regular in depositing with appropriate authorities, the undisputed statutory dues, including Provident Fund, Investor Education Protection Fund, and Employees State Insurance, Income Tax, Sales Tax, Service tax. Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it and there were no undisputed statutory dues in arrears, as at the date of the Balance Sheet under report, for a period of more than six months from the date they became payable except Sales tax of Rs 7,74,138/-, service tax of Rs 24,663 profession tax Rs 7,768/-, and Excise duty Rs 3,22,000/-

9.2. According to the information furnished to us, the following amounts of Excise Duty and Sales Tax, have been, disputed by the Company, and hence, were not deposited to the concerned authorities at date of the Balance Sheet under report

Name of Statute Nature of Amount Parted to Forum where the dispute Is pending dues which the amount relates, Central Excise Excise duty 4,34,16,614 1991 to 1994 Mumbai High Court Act, 1944

Central Excise Act, 1944 Excise duty 7,478,179 1983 to 1987 C:E. & S.TAT

Central Excise Act, 1944 Excise duty 1,400,146 1992 & 1994 Commissioner of Appeals

Central Excise Act, 1944 Excise duty 355,308 1991 & 1994 C.E. & S.TAT

Sates Tax Act Sales tax 1,349,432 1997-98 Gujarat Sales Tax Tribunal Ahmedabad

Sales Tax Act Sales tax 1,303,600 1998-99 Gujarat Sates Tax Tribunal Ahmedabad

Sales Tax Act Sales tax 923,772 1999-40 Gujarat Sales Tax Tribunal Ahmedabad

Sales Tax Act CST 31,115 1999-40 Asst Commissi oner of sales Tax (Appeal1), Ahmedabad

Sales Tax Act Sales tax 43,688 1992-93 Dy Commissio ner - Commerc ial taxes, Kolkata, (Sou th) circle

Sales Tax Act CST 58,547 1992-93 Dy Commission er - Commerci al taxes, Kol kata. (South) circle

Sales Tax Act Sales tax 42,697 1999-2000 Dy Commission er - Commerci al taxes, Kol kata, (South) circle

Sales Tax Act Sales tax 66,211 1999-2000 Dy Commission er (C1> Appea llate Secunde rabad Div

Sales Tax Act CST 104,942 1999-2000 Dy Commission er (CI> Appea llate Secunde rabad Div

Sales Tax Act CST 97,381 2001-2002 The Joint Com missioner (Ap peal) - 6, Tr ade tax Lucknow



10. According to the information and explanations furnished to us

a) It has accumulated losses at the end of the financial year of Rs 25,17,61,032

b) During the year the company has not incurred any cash loss nor in the immediately preceding financial year.

11. In our opinion and according to the Information and explanations furnished to us by the Company, there were defaults in repayment of its dues to financial institutions and banks at the date of the Balance Sheet and the company has defaulted in repayment of dues of Rs 5931.49 lacs to the financial institutions and banks, (including Rs 3432.03 lacs unprovided interest, penal interest and interest on interest accrued & due)

12. According to the information and explanation given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not chit fund, nldhi, mutual benefit fund or a society. Accordingly, the provisions of clause 4 (xiii) of the Order, is not applicable to the company.

14. According to the information and explanation given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, clause (xry) of the Order, is not applicable to the company.

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

16. The Company has not taken any term loan during the year.

17. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised during the year on short — term basis have not been used for long -term investment.

13. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act Accordingly, the provisions of clause 4 (xviif) of the order are not applicable to the company.

19. The Company has not issued any debentures during the year. However, the company had issued debentures to UTt amounting to Rs 125 lacs in the year 1991 for which securities are yet to be created.

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

21. During the course of our examination of the accounts of the Company in accordance with generally accepted auditing practices, we have not come across any instances of fraud on or by the Company, nor have we been informed by the management, of any such instance being noticed or reported during the year.



For SHANMARLAL JAIN AND ASSOCIATES

Chartered Accountants

Firm Registration Number 109901W

S.L Agrawal

Partner

Membership No 72184

Place :Mumbai

Date: 26th August,2010