Bells Controls Ltd.की ऑडीटर रिपोर्ट

Sep 30, 2010

We have audited the attached Balance Sheet of Bells Controls Limited as on 30th September 2010, and the Profit and Loss Account for the period of twelve months ended on that date annexed thereto. These financial statements are the responsibility of the Company's management Our responsibility Is to express an opinion on these financial statements based on our audit

We conducted our audit in accordance with auditing standards generally accepted in India, Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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.

1. As required by the Companies (Auditor's Report) Order, 2003 Issued by the Central Government in terms of Section 227(4A) of the Companies Act* 1956, and according to the information and explanations given to us and on the basis of such checks as we have considered appropriate, and subject to the non availability of relevant details/information/records due to the reasons given in Note viii of Schedule 17B, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order to the extent applicable to the Company. .

2. As indicated in Note viii of Schedule 17Bt relevant records and details for the purpose of the audit in respect of the manufacturing units, branches and various other divisions were not available for our verification. In view of the above and in the absence of relevant details/records and/or full information/reconcillations/confirmations, we are unable to express any opinion on the amounts of various assets and liabilities, expenses and income and impact thereof on the loss and net worth of the company including with regard to (i) fixed assets including those relating to Power Transmission Division and depreciation thereon as given in note ix(a) and xiv (ii) inventories as given in Note ix(b); (lii) cash balance as given in Note ix(c); (tv) sundry debtors, sundry creditors, loans & advances and interest thereon as given in Note ix(d)f ix(e) and xi; (v) debit and credit balances, cash credit, overdraft and current account balances and deposit with banks as given in Note x(a), (vi) liabilities in respect of items disclosed under contingent liabilities and adequacy of the disclosure/ provision in this respect as given in Note vii.

3. In absence of relevant information and/or details, we are unable to comment and ascertain the impact thereof with respect to the shortfall in recovery of sundry debtors and loans & advances as given in note xv(a) and xv(b) of Schedule 17B.

4. Attention is drawn to the following notes in Schedule 17B: (a) Note xvi regarding non provision/ascertainment of statutory liabilities and interest thereon, if any, pending determination of amount thereof, (b) Note xii regarding non ascertainment/ adequacy of provision for overdue interest including/compound interest/charges on secured and unsecured loans and liabilities, (c) Note xiii regarding non ascertainment/provision of customs, port charges etc, in respect of stocks and capital goods and interest thereon, (d) non disclosure of dues to small scale industries as given in note xvii, (e) Note xviii regarding non-compilation and disclosure of segmental reporting, consolidated financial statements, deferred tax and related party transactions,

5. In our opinion, subject to note viii regarding non ascertainment of events occurring after the date of balance sheet, note ix(d) regarding non alignment of foreign currency assets and liabilities and note xix regarding non disclosure of information with respect to consolidated financial statements, segmental reporting, related party transactions and non accounting of deferred taxation, the Balance Sheet and the Profit and Loss Account comply with the accounting standards referred to in sub-section (30) of Section 211 of the Companies Act, 1956;

6. On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the Director is disqualified to be appointed as director under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

7. Further to the above, we report that the information and explanations which to the best of pur knowledge and belief were necessary for our audit and maintenance of proper books of accounts as required by law so far as appears from our examination of these books are subject to the limitations expressed by us in our comments in para 2 to 5 above and the Annexure referred to in paragraph (1).

8. In view of our observations in Para 2 to 5, Para 6 and in the annexure referred to in Para 1 above, non availability of records / details/ reconciliations thereof and other constraints, and our inability to ascertain and comment on the overall impact as per para 7 with respect to these, we are unable to express our opinion on whether the said Balance Sheet and Profit and Loss account are in agreement with the books of account and give in the prescribed manner the information required by the Companies Act, 1956 and whether they 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 the affairs of the company as at 30th September, 2010, and

b) In the case of the profit and loss account, of the loss of the company for the period ended on that date.

ANNEXURE REFERRED TO IN PARA 1 OF THE AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF BELLS CONTROLS LIMITED FOR THE TWELVE MONTHS PERIOD ENDED 30TH SEPTEMBER 2010:

1. In view of the non availability of records, we are unable to comment on the state of the records in respect of fixed assets. Further, as indicated in Note ix(a) of Schedule 17B, physical verification of the fixed assets of the Company could not be carried out during the year. In view of the above, it is not possible to ascertain and comment on the discrepancies, if any, between the book records and the physical inventory.

2. During the year no substantial part of fixed assets has been disposed off by the Company. Therefore, the provisions of paragraph 4(i)(c) of the aforesaid order, in our opinion, are not applicable to the Company.

3. As indicated in Note tx(b) of Schedule 17B, physical verification of the finished goods, stores and spare parts and raw materials, including those lying in transit, stock lying at site and with third parties could not be carried out during the year In respect of third party stocks and those lying at ports, other sites etc,, and confirmations from the parties were not available. Accordingly, it has not been possible to ascertain and comment on the discrepancies, if any, in the stocks at the year end the consequential adjustments to be carried out and ascertainment of amount thereof.

4. In view of our observations in notes vNi, ix(b), and xiii, it has not been possible for us to ascertain whether the valuation of stocks of finished goods, stores and spare parts, raw materials is fair and proper in accordance with normally accepted accounting principles and is on the same basis as in the earlier year.

5. As far as we could ascertain from the relevant records and registers as available and based on management's representation, the Company has not taken any loans, secured or unsecured, from group / associated companies. However, register under section 301 of the Companies Act, 1956 as indicated in Note viii of schedule 17B, was not accessible for our verification and accordingly we are unable to comment on the transactions with parties required to be listed therein.

6. No comment can be made by us in view of contents of pare 4 above under para 4 (lll)( c) to 4(l 11) (d) of the aforesaid order.

7. In view of non-availability of information/records, we are not able to comment on the adequacy of internal control procedures for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods. As per our previous comment, no opinion can be passed on major weakness in internal control.

8. According to information and explanation given to us( there was no transaction during the year under audit, attracting clause v(a) of the aforesaid order.

9. In view of our comment in para 8 above, clause v(b) of the aforesaid is not applicable,

10. According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year and hence clause (vi) of the aforesaid order is not applicable to the Company.

11. The Company did not have an internal audit during the year under audit.

12. We are informed that the maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Company's Aot, 1956.

13. a) The Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

b) In view of suspension of operations and non availability of information/records as mentioned in note viii of schedule 17B and having regard to note x(a) regarding non reconciliation / confirmation of debit/credit balances and bank balances and the non ascertainment of the status of liabilities with regard to contingencies/claims referred to note vii and xi of schedule 17B, we are unable to comment on the undisputed amounts of sales tax, Investors Education Protection Fund, Provident Fund, Employees' State Insurance, Income Tax, Excise Duty and Custom Duty outstanding as on the date of balance sheet for more than six months from the date thay became payable. However, the aggregate liability with respect to these, as per the book balance as on 30.09.10 was Rs. 1,30,47,527 (details as per note xi).

c) i) According to the information and explanations given to us, the following are the undisputed amounts payable in respect of sales tax, Investors Education Protection Fund, Provident Fund, Tax Deducted at Source which were outstanding as at 30.09.2010 for a period of more than six months from the date they became payable:

According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, excise duty and cess which have not been deposited on account of any dispute other than disputed sales tax /customs duty as indicated befow:

Nature of the Nature of Amount Period of which Forum where Status disputed dues Rs. the amount relates dispute is pending

West Bengal Sales West Bengal Sales 1,53,10,062 1980-81,83, 85-86, Deputy Commissioner Tax Act Tax Act 87,93-94, 95-96, of Commercial Tax 97-98, 99-00, 01-02

Central Sales Tax Act Central Sales Tax Act 4,14,66,922 1980-81, 83,85-86, West Bengal Sales. 87,93-94, 95-96; Tax Revisional Board 97-98, 99-00, 01-02

Year Penalty Custom Duty Amount Forum where dispute is pending

1995-96, 97, 8,66,56,053 81,42,694 9,47,98,947. Director General of Foreign Trade 98, 2000

14. The Company has accumulated losses which is exceeding fifty percent of its net worth. The Company has also incurred cash losses during the financial year covered by our report and the immediately preceding financial year.

15. According to the information and explanations given to us the company has defaulted in repayment of dues to Banks and have been declared NPA by the lending Banks. However in - absence of adequate reconciliation and bank statement as mentioned in note x(a) of schedule 17B we are unable to quantify the said default and aiso mention the period of such default,

16. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentu res and other similar securities,

17. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of ciause (xiii) of paragraph 4 of the aforesaid order are not applicable to the Company,

18. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of paragraph 4 (xiv) of the aforesaid order are not applicable to the Company.

19. The Company has not given any guarantee for the loan taken by others from bank or financial institutions during the year.

20. In view of our comments In pare 2 to 5 we are unable to comment on (a) whether the term loan from State Bank of India was applied for the purpose for which the loan was obtained and (b) whether the funds raised on short term basis have been used for long term investment and vice versa. ’

21. The Company has not raised any money by issue of shares during the year. Therefore, the provisions of Para 4(xviii) of the aforesaid order are not applicable to the Company.

22. The Company has not issued any debentures. Accordingly, the provisions of para 4(xix) of the aforesaid order are not applicable to the Company.

23. The Company has not raised any money by public issue during the year. Therefore, the p rovision s of para 4{xx) of the aforesaid order are not applicab le to the Company.

24. During the course of our examination of books of account carried out in accordance with generally accepted auditing practices, we have neither come across any instance of fraud on or by the company nor have we been informed of such case by the management.

For Abhik Basu & Associates

Chartered Accountants

Place : Kolkata A. K. Basu

Date : 28.02.2011 Proprietor

---

Sep 30, 2009

We have audited the attached Balance Sheet of Bells Controls Limited as on 30th September 2009, and the Profit and Loss Account for the period of twelve months ended on that date annexed thereto, These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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 f or our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and according to the information and explanations given to us and on the basis of such checks as we have considered appropriate, and subject to the non availability of relevant details/information/ records due to the reasons given in Note viii of Schedule 17B, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order to the extent applicable to the Company,

2. As indicated in Note viii of Schedule 17B, relevant records and details for the purpose of the audit in respect of the manufacturing units, branches and various other divisions were not available for our verification. In view of the above and in the absence of relevant details/records and/or full information/reconciliations/confirmations, we are unable to express any opinion on the amounts of various assets and liabilities, expenses and income and impact thereof on the loss and net worth of the company including with regard to (i) fixed assets including those relating to Power Transmission Division and depreciation thereon as given in note ix(a) and xiv (ii) inventories as given in Note ix(b); cash balance as given in Note ix(c); (iv) sundry debtors, sundry creditors, loans & advances and interest thereon as given in Note ix(d), ix(e) and xi; (v) debit and credit balances, cash credit, overdraft and current account balances and deposit with banks as given in Note x(a), (vi) liabilities in respect of items disclosed under contingent liabilities and adequacy of the disclosure/ provision in this respect as given in Note vii.

3. in absence of relevant information and/or details, we are unable to comment and ascertain the impact thereof with respect to the shortfall in recovery of sundry debtors and loans & advances as given in note xv(a) and xv(b) of Schedule 17B.

4. Attention is drawn to the following notes in Schedule 17B: (a) Note xvi regarding non provision/ascertainment of statutory liabilities and interest thereon, if any, pending determination of amount thereof, (b) Note xii regarding non ascertainment/ adequacy of provision for overdue interest including/compound interest/charges on secured and unsecured loans and liabilities, (c) Note xiii regarding non ascertainment/ provision of customs, port charges etc, in respect of stocks and capital goods and interest thereon, (d) non disclosure of dues to small scale industries as given in note xvii, (e) Note xviii regarding non-compilation and disclose u re of segmental reporting, consolidated financial statements, deferred tax and related party transactions,

5. In our opinion, subject to note viii regarding non ascertainment of events occurring after the date of balance sheet, note ix(d) regarding non alignment of foreign currency assets and liabilities and note xix regarding non disclosure of information with respect to consolidated financial statements, segmental reporting, related party transactions and non accounting of deferred taxation, the Balance Sheet and the Profit and Loss Account comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

6. On the basis of written representation s received from the sectors and taken on record by the Board of Directors, we report that none of the Director is disqualified to be appointed as director under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

7. Further to the above, we report that the information and explanations which to the best of our knowledge and belief were necessary for our audit and maintenance of proper books of accounts as required by law so far as appears from our examination of these books are subject to the limitations expressed by us in our comments in pare 2 to 5 above and the Annexure referred to In paragraph (1).

8. In view of our observations in Para 2 to 5, Para 6 and in the annexure referred to in Para 1 above, non availability of records /details/ reconciliations thereof and other constraints, and our inability to ascertain and comment on the overall impact as per Para 7 with respect to these, we are unable to express our opinion on whether the and Balance Sheet and Profit and Loss account are in agreement with the books of account and give in the prescribed manner the information required by the Companies Act, 1956 and whether they 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 the affairs of the company as at 30th September, 2009, and

b) In the case of the profit and loss account, of the loss of the company for the period ended on that date.

ANNEXURE REFERRED TO IN PARA 1 OFTHE AUDITORS1 REPORT OF EVEN DATE TO THE MEMBERS OF BELLS CONTROLS LIMITED FORTHETWELVE MONTHS PERIOD ENDED 30TH SEPTEMBER 2009:

1. In view of the non availability of records, we are unable to comment on the state of the records in respect of fixed assets. Further, as indicated in Note ix{a) of Schedule 17B, physical verification of the fixed assets of the Company could not be carried out during the yean In view of the above, it is not possible to ascertain and comment on the discrepancies, if any, between the book records and the physical inventory.

2. During the year no substantial part of fixed assets has been disposed off by the Company. Therefore, the provisions of paragraph 4(i)(c) of the aforesaid order, in our opinion, are not applicable to the Company,

3. As indicated in Note ix(b) of Schedule 17B, physical verification of the finished goods, stores and spare parts and raw materials, including those lying in transit, stock lying at site and with third parties could not be carried out during the year. In respect of third party stocks and those lying at ports, other sites etc., and confirmations from the parties were not available. Accordingly, it has not been possible to ascertain and comment on the discrepancies, if any, in the stocks at the year end the consequential adjustments to be carried out and ascertainment of amount thereof,

4. In view of our observations in notes viii ix(b), and xii, it has not been possible for us to ascertain whether the valuation of stocks of finished goods, stores and spare parts, raw materials is fair and proper in accordance with normally accepted accounting principles and is on the same basis as in the earlier yean

5. As far as we could ascertain from the relevant records and registers as available and based on management's representation, the Company has not taken any loans, secured or unsecured, from group / associated companies. However, register under section 301 of the Companies Act, 1956 as indicated in Note viii of schedule 17B, was not accessible for our verification and accordingly we are unable to comment on the transactions with parties required to be listed therein.

6. No comment can be made by us in view of contents of pare 4 above under Para 4 (iii)( c) to 4(iii)(d) of the aforesaid order.

7. In view of non-availability of information/records, we are not able to comment on the adequacy of internal control procedures for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods. As per our previous comment, no opinion can be passed on major weakness in internal control.

8. According to information and explanation given to us, there was no transaction during the year under audit, attracting clause v(a) of the aforesaid oracle.

9. In view of our comment in Para a above, clause v(b) of the aforesaid is not applicable.

10. According to the information and explanations given to us t the Company has not accepted any deposit from the public during the year and hence clause (vi) of the aforesaid order is not applicable to the Company.

11. The Company did not have an internal audit during the year under audit.

12. We are informed that the maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Company's Act, 1956.

13. a) The Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

b) In view of suspension of operations and non availability of information/records as mentioned in note viii of schedule 17B and having regard to note x(a) regarding non reconciliation / confirmation of debit/credit balances and bank balances and the non ascertainment of the status of liabilities with regard to contingencies/claims referred to note vii and xi of schedule 17B, we are unable to comment on the undisputed amounts of sales tax, Investors Education Protection Fund, Provident Fund, Employees' State Insurance, Income Tax, Excise Duty and Custom Duty outstanding as on the date of balance sheet for more than six months from the date they became payable. However, the aggregate liability with respect to these, as per the book balance as on 30.09.09 was Rs.1,30,54,613 (details as per note xi).

c) i) According to the information and explanations given to us, the following are the undisputed amounts payable in respect of sales tax, Investors Education Protection Fund, Provident Fund, Tax Deducted at Source which were outstanding as at 30j09.2007 for a period of more has six months from the date they became payable:

Tax Deducted at Source: Rs.7086

ii) According to the information and explanation given to us, there are no dues of sales tax, income tax, .customs duty, excise duty and cess which have not been deposited on account of any dispute other than disputed sales tax/ customs duty as indicated below:

Nature of the Nature of Amount Period of which Forum where Status disputed dues Rs. the amount relates dispute is pending

West Bengal Sales West Bengal Sales 1,53,10,062 1980-81,83,85-86, Deputy Commissioner

Tax Act Tax Act 87,93-94,95-96, of Commerci -al Tax 97-98,99-00,01-02

Central Sales Tax Act Central Sales Tax Act 4,14,66,922 1980-8183,85-86, West Bengal Sales 87,93-94,95-96, Tax Revision -al Board 97-98,99-00, 01-02

Year Penalty Custom Duty Amount Forum where dispute is pending

1995-96,97, 8,66,56,053 81,42,894 9,47,98,947 Director General of Foreign Trade 98,2000

14. The Company has accumulated losses which is exceeding fifty percent of its net worth. The Company has also incurred cash losses during the financial year covered by our report and the immediately preceding financial year.

15. According to the information and explanations given to us the company has defaulted in repayment of dues to Banks and have been declared NPA by the lending Banks. However in absence of adequate reconciliation and bank statement as mentioned in note x(a) of schedule 17B we are unable to quantify the said default and also mention the period of such default.

16. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

17. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the aforesaid order are not applicable to the Company.

18. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of paragraph 4 (xiv) of the aforesaid order are not applicable to the Company.

19. The Company has not given any guarantee for the loan taken by others from bank or financial institutions during the year.

20. In view of our comments in pare 2 to 5 we are unable to comment on {a) whether the term loan from State Bank of India was applied for the purpose for which the loan was obtained and (b) whether the funds raised on short term basis have been used for long term investment and vice versa.

21 . The Company has not raised any money by issue of shares during the year Therefore, the provisions of Para 4(xviii) of the aforesaid order are not applicable to the Company.

22. The Company has not issued any debentures. Accordingly, the provisions of Para 4(xix) of the aforesaid order are not applicable to the Company.

23. The Company has not raised any money by public issue during the year. Therefore, the provisions of Para 4(xx) of the aforesaid order are not applicable to the Company.

24. During the course of our examination of books of account carried out in accordance with generally accepted auditing practices, we have neither come across any instance of fraud on or by the company nor have we been informed of such case by the management.

For Abhik Basu & Associates

Chartered Accountants

Place : Kolkata A. K. Basu

Date : 01.03.2010 Proprietor

---

Sep 30, 2008

We have audited the attached Balance Sheet of Bells Controls Limited as on 30th September 2008, and the Profit and Loss Account for the period of twelve months ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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.

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and according to the information and explanations given to us and on the basis of such checks as we have considered appropriate, and subject to the non availability of relevant details/ information/records due to the reasons given in Note viii of Schedule 17B, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order to the extent applicable to the Company.

2. As indicated in Note viii of Schedule 17B, relevant records and details for the purpose of the audit in respect of the manufacturing units, branches and various other divisions were not available for our verification. In view of the above and in the absence of relevant details/records and/or full information/ reconciliations/confirmations, we are unable to express any opinion on the amounts of various assets and liabilities, expenses and income and

3. Impact thereof or the loss and net worth of the : company including with regard to (i) fixed assets including those relating to Power Transmission Division and depreciation thereon as given in note ix(a) and xiv (ii) inventories as given in Note ix(b); (the cash balance as given in Note ix(c); (iv) sundry debtors, sundry creditors, loans & advances and interest thereon as given in Note ix(d), ix(e) and xi;

(v) debit and credit balances, cash credit, overdraft and current account balances and deposit with banks as given in Note x(a), (vi) liabilities in respect of items disclosed under contingent liabilities and adequacy of the disclosure/ provision in this respect as given in Not even,

3. In absence of relevant information and/or details, we are unable to comment and ascertain the impact thereof with respect to the shortfall in recovery of sundry debtors and loans & advances as given in note xv(a) and xv(b) of Schedule 17B.

4. Attention is drawn to the following notes in Schedule 17B: (a) Note xvi regarding non provision/ ascertainment of statutory liabilities and interest thereon, if any, pending determination of amount thereof, (b) Note xii regarding non ascertainment/ adequacy of provision for overdue interest including/ compound interest/charges on secured and unsecured loans and liabilities, (c) Note xiii regarding non ascertainment/ provision of customs, port charges etc, in respect of stocks and capital goods and interest thereon, (d) non disclosure of dues to small scale industries as given in note xix (e) Note xxi regarding non-compilation and disclosure of segmental reporting, consolidated financial statements, deferred tax and related party transactions, (f) Note xvii(a) regarding recognition of revenue from long term contracts based on the billings to the customer, (g) Note xvii(b) regarding non provision of foreseeable losses in respect of continuing contracts.

5. In our opinion, subject to note viii regarding non ascertainment of events occurring after the date of balance sheet, note ix{d) regarding non alignment of foreign currency assets and liabilities and note xxi regarding non disclosure of information with respect to consolidated financial statements, segmental reporting, related party transactions and non accounting of deferred taxation, the Balance Sheet and the Profit and Loss Account comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

6. On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the Director is disqualified to be appointed as director under Clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

7. Further to the above, we report that the information and explanations which to the best of our knowledge and belief were necessary for our audit and maintenance of proper books of accounts as required by law so far as appears from our examination of these books are subject to the limitations expressed by us in our comments in para 2 to 5 above and the Annexure referred to in paragraph (1).

8. In view of our observations in Para 2 to 5, Para 6 and in the annexure referred to in Para 1 above, non availability of records / details/ reconciliations thereof and other constraints, and our inability to ascertain and comment on the overall impact as per para 7 with respect to these, we are unable to express our opinion on whether the said Balance Sheet and Profit and Loss account are in agreement with the books of account and give in the prescribed manner the information required by the Companies Act, 1956 and whether they 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 the affairs of the company as at 30th September, 2008, and

b) in the case of the profit and loss account, of the loss of the company for the period ended on that date.

ANNEXURE REFERRED TO IN PARA 1 OF THE AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF BELLS CONTROLS LIMITED FOR THE TWELVE MONTHS PERIOD ENDED 30TH SEPTEMBER 2008:

1. In view of the non availability of records, we are unable to comment on the state of the records in respect of fixed assets. Further, as indicated in Note (a) of Schedule 17B, physical verification of the fixed assets of the Company could not be carried out during the year. In view of the above, it is not possible to ascertain and comment on the discrepancies, if any, between the book records and the physical inventory.

2. During the year no substantial part of fixed assets has been disposed off by the Company. Therefore, the provisions of paragraph 4(i)(c) of the aforesaid order, in our opinion, are not applicable to the Company.

3. As indicated in Note ix(b) of Schedule 17B, physical verification of the finished goods, stores and spare parts and raw materials, including those lying in transit, stock lying at site and with third parties could not be carried out during the year. In respect of third party stocks and those lying at ports, other sites etc, confirmations from the parties were not available. Accordingly, it has not been possible to ascertain and comment on the discrepancies, if any, in the stocks at the year end, the consequential adjustments to be carried out and ascertainment of amount thereof.

4. In view of our observations in notes viii, ix(b), and xiii, it has not been possible for us to ascertain whether the valuation of stocks of finished goods, stores and spare parts, raw materials is fair and proper in accordance with normally accepted accounting principles and is on the same basis as in the earlier year

5. As far as we could ascertain from the revel it records and registers as available and based on management's representation, the Company has not taker any loans, secured or unsecured, from group / associated companies. However, register under section 301 of the Companies Act, 1956 as indicated in Note viii of schedule 17B, was not accessible for our verification and accordingly we are unable to comment on the transactions with parties required to be listed therein,

6. No comment can be made by us in view of contents of pare 4 above under Para 4 (lll)( c) to 4(lll)(d) of the aforesaid order

7. In view of non-availability of information/records, we are not able to comment on the adequacy of internal control procedures for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods. As per our previous comment, no opinion can be passed on major weakness in internal control.

8. According to information and explanation given to us, there was no transaction during the year under audit, attracting clause v(a) of the aforesaid order

9. In view of our comment in para 8 above, clause v(b) of the aforesaid is not applicable.

10. According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year and hence clause (vi) of the aforesaid order is not applicable to the Company.

11 The Company did not have an internal audit during the year under audit.

12. We are informed that the maintenance of cost records has not been prescribed by the Central Government under Section 209(1 ){d) of the Company's Act, 1956.

13. a) The Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

*b) In view of suspension of operations and non availability of information/records as mentioned in note viii of schedule 17B and having regard to note x(a) regarding non reconciliation / confirmation of debit/credit balances and bank balances and the non ascertainment of the status of liabilities with regard to contingencies/claims referred to note vii and xi of schedule 17B, we are unable to comment on the i undisputed amounts of sales tax, Investors Education Protection Fund, Provider} State Insurance, Income Tax, Excise Duty and Custom Duty outstanding as on the date of balance sheet for more than six months from the date they became payable. However, the aggregate liability with respect to these, as per the book balance as on 30.09.08 was Rs. 1,31,28,715 (details as per note xi).

c) i) According to the information and explanations given to us, the following are the undisputed amounts payable in respect of sales tax, Investors Education Protection Fund, Provident Fund, Tax Deducted at Source which were outstanding as at 30.09.2007 for a period of more than six months from the date they became payable:

Tax Deducted at Source: Rs.5,297

Provident Fund : Rs.86,209

ii) According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, excise duty and cess which have not been deposited on account of any dispute other than disputed sales tax / customs duty as indicated below:

Nature of the Nature of Amount Period of which Forum where Satus Disputed dues Rs. the amount relates dispute is pending

West Bengal Sales West Bengal Sales 1,53,10,062 1980-81, 83,85-86, Deputy Commissioner Tax Act Tax Act 87,93-94,95-96, of Commerc -ial Tax 97-98,99- 00,01-02

Central Sales Tax Act Central Sales Tax Act 4,14,66,922 1980-81, 83, 85-86, West Bengal Sales Tax 87, 93-94, 95-96, Revisional Board 97-98, 99-00, 01-02

Year Penalty Custom Duty Amount Forum where dispute is pending

1995-96, 8,66,56,053 81,42,894 9,47,98,947 Director General of Foreign Trade

97,98, 2000

14. The Company has accumulated losses which is exceeding fifty percent of its net worth. The Company has also incurred cash losses during the financial year covered by our report and the immediately preceding financial year.

15. According to the information and explanations given to us the company has defaulted in repayment of dues to Banks and have been declared NPA by the lending Banks. However in absence of adequate reconciliation and bank statement as mentioned in note x(a) of schedule 17B we are unable to quantify the said default and also mention the period of such default.

16. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

17. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the aforesaid order are not applicable to the Company.

18. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of paragraph 4 (xiv) of the aforesaid order are not applicable to the Company.

19. The Company has not given any guarantee for the loan taken by others from bank or financial institutions during the year.

20. In view of our comments in pare 2 to 5 we are unable to comment on (a) whether the term loan from State Bank of India was applied for the purpose for which the loan was obtained and (b) whether the funds raised on short term basis have been used for long term investment and vice versa.

21. The Company has not raised any money by issue of shares during the year. Therefore, the provisions of Para 4(xviii) of the aforesaid order are not applicable to the Company.

22. The Company has not issued any debentures, Accordingly, the provisions of Para 4(xix) of the aforesaid order are not applicable to the Company.

23. The Company has not raised any money by public issue during the year. Therefore, the provisions of Para 4(xx) of the aforesaid order are not applicable to the Company.

24. During the course of our examination of books of account carried out in accordance with generally accepted auditing practices, we have neither come across any instance of fraud on or by the company nor have we been informed of such case by the management,

For Abhik Basu & Associates

Chartered accountants

Place: Kolkata A. K.Basu

Date: 02.03.2009 Proprietor

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Sep 30, 2006

We have audited the attached Balance Sheet of Bells Controls Limited as on 30th September 2006, and the Profit and Loss Account for the period of twelve months ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in (India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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.

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government In terms of Section 227{4A) of the Companies Act, 1956, and according to the information and explanations given to us and on the basis of such checks as we have considered appropriate, and subject to the non availability of relevant details/ information/records due to the reasons given in Note viii of Schedule 17B, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order to the extent applicable to the Company.

2. As indicated in Note viii of Schedule 17B, relevant records and details for the purpose of the audit in respect of the manufacturing units, branches and various other divisions were not available for our verification. In view of the above and in the absence of relevant details/records and/or full information/reconciliations/confirmations, we are unable to express any opinion on the amounts of various assets and liabilities, expenses and income and impact thereof on the loss and networth of the company including with regard to (i) fixed assets including those relating to Power Transmission Division and depreciation thereon as given in note ix(a) and xiv (ii) inventories as given in Note ix(b); (iii) cash balance as given in Note ix(c); (iv) sundry debtors, sundry creditors, loans & advances and interest thereon as given in Note ix(d), ix(e) and xi(v) debit and credit balances, cash credit, overdraft and current account balances and deposit with banks as given in Note x(a), (vi) liabilities in respect of items disclosed under contingent liabilities and adequacy of the disclosure/ provision in this respect as given - in Note x.

3. In absence of relevant information and/or details, we are unable to comment and ascertain the impact thereof with respect to the shortfall in recovery of sundry debtors and loans & advances as given in note xv(a) and xv(b) of Schedule 17B.

4. Attention is drawn to the following notes in Schedule 17B: (a) Note xvi regarding non provision/ascertainment of statutory liabilities and interest thereon, if any, pending determination of amount thereof, (b) Note xii regarding non ascertainment/ adequacy of provision for overdue interest including/compound interest/charges on secured and unsecured loans and liabilities, (c) Note xiii regarding non ascertainment/ provision of customs, port charges etc, in respect of stocks and capital goods and interest thereon, (d) non disclosure of dues to small scale industries as given in note xviii, (e) Note xx regarding non- compilation and disclosure of segmental reporting, consolidated financial statements, deferred tax and related party transactions, (f) Note xvii(a) regarding recognition of revenue from long term contracts based on the billings to the customer, (g) Note xvii(b) regarding non provision of foreseeable losses in respect of continuing contracts.

5. In our opinion, subject to note viii(b) regarding non ascertainment of events occurring after the date of balance sheet, note ix(d) regarding non alignment of foreign currency assets and liabilities and note xx regarding non disclosure of information with respect to consolidated financial statements, segmental reporting, related party transactions and non accounting of deferred taxation, the Balance Sheet and the Profit and Loss Account on the with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

6. On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the Director is disqualified to be appointed as director under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

7. Further to the above, we report that the information and explanations which to the best of our knowledge and belief were necessary for our audit and maintenance of proper books of accounts as required by law so far as appears from our examination of these books are subject to the limitations expressed by us in our comments in para 2 to 5 above and the Annexure referred to in paragraph (1).

8. In view of our observations in Para 2 to 5, Para 6 and in the annexure referred to in Para 1 above, non availability of records / details/ reconciliations thereof and other constraints, and our inability to ascertain and comment on the overall Impact as per para 7 with respect to these, we are unable to express our opinion on whether the said Balance Sheet and Profit and Loss account are in agreement with the books of account and give in the prescribed manner the information required by the Companies Act, 1956 and whether they 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 the affairs of the company as at 30th September, 2006, and

b) In the case of the profit and loss account, of the loss of the company for the period ended on that date.

ANNEXURE REFERRED TO IN PARA 1 OF THE AUDITORS'REPORT OF EVEN DATE TO THE MEMBERS OF BELLS CONTROLS LIMITED FOR THE TWELVE MONTHS PERIOD ENDED 30TH SEPTEMBER 2006:

1. In view of the non availability of records, we are unable to comment on the state of the records in respect of fixed assets. Further, as indicated In Note ix(a) of Schedule 178, physical verification of the fixed assets of the Company could not be carried out during the year. In view of the above, it is not possible to ascertain and comment on the discrepancies, if any, between the book records and the physical inventory.

2. During the year no substantial part of fixed assets has been disposed off by the Company. Therefore, the provisions of paragraph 4(i)(c) of the aforesaid order, in our opinion, are not applicable to the Company.

3. As indicated in Note ix(b) of Schedule 17B, physical verification of the finished goods, stores and spare parts and raw materials, including those lying in transit, stock lying at site and with third parties could not be carried out during the year. In respect of third party stocks and those lying at ports, other sites etc., confirmations from the parties were not available. Accordingly, it has not been possible to ascertain and comment on the discrepancies, if any, in the stocks at the year end, the consequential adjustments to be carried out and ascertainment of amount thereof.

4. In view of our observations in notes viii(b), ix(b), and xiii, it has not been possible for us to ascertain whether the valuation of stocks of finished goods, stores and spare parts, raw materials is fair and proper in accordance with1 normally accepted accounting principles and is on the same basis as in the earlier year.

5. As far as we could ascertain from the relevant records and registers as available and based on management's representation, the Company has not taken any loans, secured or unsecured, from group / associated companies. However, register under section 301 of the Companies Act, 1956 as indicated in Note viii (b) of schedule 17B, was not accessible for our verification and accordingly we are unable to comment on the transactions with parties required to be listed therein.

6. No comment can be made by us in view of contents of pare 4 above under para 4 (III)( c) to 4 (III)(d) of the aforesaid order.

7. In view of non-availability of information/records, we are not able to comment on the adequacy of internal control procedures for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods. As per our previous comment, no opinion can be passed on major weakness in internal control.

8. According to information and explanation given to us, there was no transaction during the year under audit, attracting clause v(a) of the aforesaid order.

9. In view of our comment in para 0 above, clause v(b) of the aforesaid is not applicable.

10. According to the Information and explanations given to us, the Company has not accepted any deposit from the public during the year and hence clause (vi) of the aforesaid order is not applicable to the Company.

11. The Company did not have an internal audit during the year under audit.

12. We are informed that the maintenance of cost records has not been prescribed by the Central Government under section 209(3)(1) of the Company's Act, 1956.

13. a) The Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

b) In view of suspension of operations and non availability of information/records as mentioned in note xii of schedule 17B and having regard to note x(a) regarding non reconciliation / confirmation of debit/ credit balances and bank balances and the non ascertainment of the status of liabilities with regard to contingencies/claims referred to note vii and xi of schedule 17B, we are unable to comment on the undisputed amounts of sates tax, Investors Education Protection Fund, Provident Fund, Employees' State insurance income Tax, Excise Duty and Custom Duty outstanding as on the date of balance sheet for more than six months from the date they became payable. However, the aggregate liability with respect to these, as per the book balance as on 30.09.06 was Rs. 1,30,18,446 (details as per note xi).

c) i) According to the information and explanations given to us, the following are the undisputed amounts payable in respect of sales tax, Investors Education Protection Fund, Provident Fund, Tax Deducted at Source which were outstanding as at 30.09.2006 for a period of more than six months from the date they became payable:

Tax Deducted at Source: Rs. 25,515

ii) According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, excise duty and cess which have not been deposited on account of any dispute other than disputed sales tax as indicated below :

Nature of the Nature of Amount Period of which Forum where Status disputed dues Rs. the amount relates dispute is pending

West Bengal Sales West Bengal Sales 1,53,10,062 1980-81, 83,85-86, Deputy Commissioner Tax Act Tax Act 87,93-94, 95-96, of Commercial Tax 97-98, 99-00, 01-02

Central Sales Tax Act Central Sales Tax Act 4,14,66,922 1980-81, 83, 85-86, West Bengal Sales 87, 93-94, 95-96, Tax Revisional Board 97-98, 99-00, 01 -02

Year Penatty Custom Duty Amount Forum where dispute is pending

1995-96, 97, 8,66,56,053 81,42,894 9,47,98,947 Director General of Foreign Trade 98, 2000

14. The Company has accumulated losses which is exceeding fifty percent of its networth. The Company has also incurred cash losses during the financial year covered by our report and the immediately preceding financial year.

15. According to the information and explanations given to us the company has defaulted in repayment of dues to Banks and have been declared NPA by the lending Banks. However in absence of adequate reconciliation and bank statement as mentioned in note x(a) of schedule 17B we are unable to quantify the said default and also mention the period of such default.

16. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

17. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the aforesaid order are not applicable to the Company.

18. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provision of paragraph 4 (xiv) of the aforesaid order are not applicable to the Company.

19. The Company has not given any guarantee for the loan taken by others from bank or financial institutions during the year.

20. In view of our comments in pare 2 to 5 we are unable to comment on (a) whether the term loan from State Bank of India was applied for the purpose for which the loan was obtained and (b) whether the funds raised on short term basis have been used for long term investment and vice versa.

21. The Company has not raised any money by issue of shares during the year. Therefore, the provisions of Para 4(xviii) of the aforesaid order are not applicable to the Company.

22. The Company has not issued any debentures. Accordingly, the provisions of para 4(xix) of the aforesaid order are not applicable to the Company.

23. The Company has not raised any money by public issue during the year. Therefore, the provisions of para 4(xx) of the aforesaid order are not applicable to the Company.

24. During the course of our examination of books of account carried out in accordance with generally accepted auditing practices, we have neither come across any Instance of fraud on or by the company nor have we been informed of such case by the management.

For Abhlk Basil & Associates.

Chartered Accountants

Place: Kolkata A. K. Basu

Date : 28.02.2008 Proprietor