Eddy Current Control (India) Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of Eddy Current Controls (India) Ltd ("the Company") which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit & Loss, the Cash Flow Statement for the year ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Standalone Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the Financial Statements.

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

In our opinion and to the best of our information and according to the explanations given to us; the aforesaid Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the State of Affairs of the Company as at 31st March, 2015, and its Profit and its cash flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c) The Balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of written representations received from the directors, as on 31st March, 2015, and taken on record by the Board of directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of section 164(2) of the Act;

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

a. The Company does not have any pending litigations which would impact its financial position though there is a demand from sales tax authorities for Rs.6,84,272/- towards non submission of C Form relating to earlier years against which the company has filed appeal and the company has been legally advised that the additional demand raised is likely to be deleted or substantially reduced and hence no provision has been made.

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

c. The company has no amount required to be transferred, to the Investor Education and Protection Fund during the year.

Annexure to the Auditors' Report

Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' of our Report of even date to the members of Eddy Current Controls (India) Ltd on the accounts of the company for the year ended 31st March, 2015.

On the basis of such checks as we considered appropriate and according to the information and Explanations given to us during the course of our audit, we report that:

i) In respect of its fixed assets:

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

(b) As explained to us, fixed assets have been physically verified by the management during the year in accordance with the phased programme of verification adopted by the management which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

ii) In respect of its inventory:

a) As explained to us, the inventories have been physically verified at regular intervals as well as at the end of the year by the Management.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on physical verification of stocks as compared to book records were not material and have been properly dealt with in the books of account.

iii) In respect of loans, secured or unsecured, granted to the parties covered in register maintained under section 189 of the Companies Act 2013:

(a) According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013; and therefore paragraph 3(iii) of the Order is not applicable.

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

v) In our opinion and according to the information and explanation given to us, the company has not received any public deposits during the year and therefore the provisions of clause (v) of paragraph 3 of the CARO 2015 are not applicable to the company.

vi) As informed to us, the Central Government has not prescribed maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the Company.

vii) In respect of statutory dues:

(a) According to the records of the company, the company is irregular in depositing undisputed statutory dues including Sales Tax, Provident Fund, Employees' State Insurance, to the extent applicable with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, sales tax, VAT, Cess and other material statutory dues in arrears /were outstanding as at 31 March, 2015 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise as at 31st March, 2015, the Company has been registered for less than 5 years; hence, clause 3(vii)(c) of the Order is not applicable to it and Therefore were no amounts which required to be transferred by the Company to the Investor Education and Protection Fund.

viii) The company does not have the accumulated losses at the end of financial year. The company has not incurred any Cash losses during the financial covered by our Audit and the immediately preceding financial year.

ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

x) In our opinion, and according to the information and the explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year;

xi) The company has not obtained any term loan during the year, so this para of order is not applicable.

xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Vasu and Jagan Associates, Chartered Accountants.

(Sd) K. Sivaraamkrishnan Partner

Place: Coimbatore Date: 04/09/2015 M. No.: 024,74 FRN : 008966S

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Mar 31, 2014

We have audited the accompanying financial statements of Eddy Current Controls (India) Ltd ("the Company"), which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and, financial performance in accordance with the Accounting Standards notified under ''the Companies Act, 1956'' (the "Act") read with the General Circular 15/2013 dated 13th September 2o13 of Ministry of Corporate Affairs of in respect of the section 133 of the Companies Act 2013. 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.

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

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

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

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

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

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

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

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

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

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

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

d) In our opinion, the Balance Sheet and Statement of Profit and Loss, comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September 2013 of Ministry of Corporate Affairs of in respect of the section 133 of the Companies Act 2013;

e) On the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Eddy Current Controls (India) Ltd. on the accounts of the company for the year ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) The company has maintained records in loose leaf form showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories of materials. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company

(a) The Company has taken unsecured loan from one party covered in the register maintained u/s. 301 of the Companies Act, 1956. The loan was taken free of interest as such the terms do not appear to be prima facie prejudicial to the interest of the company. The amount outstanding in the above transaction he year end is RS. 58.75 Lakhs.

(b) The company has granted advance to another Company under the same management amounting to RS23.63 Lakhs. No interest has been charges on the above loan for the year ended 31.03.2014. The repayment of the principal and interest thereon is not regular and so far the Company has not taken any action to recover the same.

4. In our opinion the internal control procedure has to be strengthened.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company does not have any formal internal audit system.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records are yet to be maintained.

9. (a) According to the records of the company, the company is irregular in depositing undisputed statutory dues including Sales Tax, Provident Fund, Employees'' State Insurance, to the extent applicable with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax, and sales tax which have not been deposited on account of any disputes.

(C) According to the information and explanations given to us, out of sales tax dues amounting to Rs. 10,45,287/- as per sales tax amnesty scheme Rs. 7,25,497/- has been paid up to 31.03.2014.

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

11. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

12. According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments.

13. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

14. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

15. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

16. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

17. The Company has no outstanding debentures during the period under audit.

18. The Company has not raised any money by public issue during the year.

19. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Vasu And Jagan Associates. Chartered Accountants

Place: Coimbatore (Sd) K. Sivaraamakrishnan Date: 04/09/2014 Partner M No.: 24374 FRN: 008966S

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Mar 31, 2011

We have audited the attached Balance Sheet of M/s. Eddy Current Controls (India) Limited, as at 31st March 2011 and also the Profit and Loss Account and Cash Flow for the year ended on that date annexed thereto These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1) We have obtained all the information and explanations, which to the best of our knowledge were necessary for the purpose of our audit, except to the extent of the limitations as stated under 6 below and the annexure to this report. We have relied on the management in respect of the disclosure of balances due to Micro, small and Medium Enterprises

2) 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.

3) The Balance Sheet, Profit & Loss Account & Cash Fiow Statement referred to in this report are in agreement with the books of account.

4) In our opinion, the Balance Sheet, Profit & Loss A/c. and Cash Flow Statement comply with the Accounting Standards referred to sub section (3C) of Section 211 of the Companies Act, 1956.

5) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors are disqualified as on 31.3.2011 from being appointed as Director in terms of Clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

6) As stated in Note No.8 attached to accounts, Sundry Debtors, Creditors, Loans and Advances and certain bank accounts (inoperative) are subject to confirmation/ reconciliation, which have not been sought for by the Company and includes certain long outstanding balances. The realisability of debtors, loans and advances and liability to creditors and loans could not be effectively verified by us. On the basis of available information, we are not in a position to quantify the charge that the company may have to take on these counts.

7) In our opinion and to the best of our information and according to the explanations given to us, Subject to the paragraphs 4,5&6 and subject to Note No.4&13 regarding development expenses incurred on switched reluctance drives/clutch gear unit not written off and shown under miscellaneous expenditure the said accounts read with the other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

ii) In the case of Profit and Loss Account, of the Profits of the Company for the year ended on that date.

and

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

8) As required by the Companies (Auditor's Report) Order 2003, as amended, issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

ANNEXURE TO THE AUDITORS'REPORT (Referred to in paragraph 8 of our report of even date)

i)

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

(b) We have been informed that major item of fixed asset excluding those lying with outsiders as stated in the note 3 of the accounts have been physically verified by the management as at the end of the year which in our opinion is reasonable having regard to the size of the company and nature of its business. As explained to us no material discrepancies were noticed on such verification.

(c) There is no disposal of substantial part of fixed assets during the year.

(ii)

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

(b) In our opinion and according to the information and explanation given to us, procedure for Physical verification of stock followed by the company are reasonable and adequate in relation to the size of the company and nature of its business.

(c) The Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification of inventory with the book records.

(iii)

(a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act.

(b) The Company has taken interest free loan from Directors and the maximum amount / outstanding balance at the year end is Rs.14.35 Lakhs. The Terms and conditions of the above loan is not prima facie prejudicial to the interest of the company. The company is not regular in payment of principal amount. However, steps are taken by the company to repay them at the earliest.

(iv) In our opinion the existing internal control system with regard to the purchase of inventory, fixed assets and for the sale of goods and services has to be streamlined.

(v) To the best of our knowledge and belief, and according to the information and explanations given to us, we are of opinion that the transactions that need to be entered into the register in pursuance of section 301 of the Companies Act, 1956 have been so entered;

(vi) In our opinion, and according to the information and explanation given to us the company has not accepted any deposits from the public.

(vii) In our opinion and according to the information and explanations given to us, the company is yet to install internal audit system.

(viii) We have been informed by the Management that no cost records have been prescribed u/s.209(1 )(d) of the Companies Act, 1956 in respect of products manufactured by the company except for automobiles, since the company has ceased production of automobiles.

(ix)

(a) The Company is generally regular in depositing undisputed statutory dues of Provident Fund, Employees' State Insurance, Sales Tax, Service Tax etc. with the appropriate authorities. According to the information and explanation given to us there are no undisputed arrears of statutory dues which were outstanding for more than six months as on 31.3.2011.

(b) According to the information and explanations given to us, salestax dues amounting to Rs. 1045287 as per salestax amnesty scheme has been cleared upto 1993-94 (Rs. 7.85 Lakhs)

(ix) The accumulated losses of the company at the end of the financial year 31.3.2010, is less than 50% of its net worth. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(x) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution and bank.

(xi) During the year the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) The provisions of special statute applicable to chit fund, Nidhi/Mutual Benefit fund/ societies are not applicable to the Company.

(xiii) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xiv) The Company has not given guarantee for loans taken by others from bank or financial institutions.

(xv) According to the information and explanations given to us and on an overall examination of the source and application of the funds of the company, we report that no funds raised on short term basis has been used for long term investments.

(xvi) The company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act 1956.

(xvii) In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report.

(xviii) During the year covered by our audit report, the Company has not raised any money by public issues.

(xix) To the best of knowledge and belief and according to the information and explanations given to us, no frauds on or by the company has been noticed or reported during the year.

For VASU & JAGAN ASSOCIATES

Chartered Accountants

K. SIVARAAMAKRISHNAN

Partner Membership No. 24374

COIMBATORE 06.9.2011

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Mar 31, 2010

We have audited the attached Balance Sheet of M/s. Eddy Current Controls (India) Limited, as at 31st March 2010 and also the Profit and Loss Account and Cash Flow for the year ended on that date annexed thereto These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1) We have obtained all the information and explanations, which to the best of our knowledge were necessary for the purpose of our audit, except to the extent of the limitations as stated under 6 below and the annexure to this report. We have relied on the management in respect of the disclosure of balances due to Micro, small and Medium Enterprises

2) 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.

3) The Balance Sheet, Profit & Loss Account & Cash Flow Statement referred to in this report are in agreement with the books of account.

4) In our opinion, the Balance Sheet, Profit & Loss A/c. and Cash Flow Statement comply with the Accounting Standards referred to sub section (3C) of Section 211 of the Companies Act, 1956.

5) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors are disqualified as on 31.3.2010 from being appointed as Director in terms of Clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

6) As stated in Note No.8 attached to accounts, Sundry Debtors, Creditors, Loans and Advances and certain bank accounts (inoperative) are subject to confirmation/reconciliation, which have not been sought for by the Company and includes certain long outstanding balances. The readability of debtors, loans and advances and liability to creditors and loans could not be effectively verified by us. On the basis of available information, we are not in a position to quantify the charge that the company may have to take on these counts.

7) In our opinion and to the best of our information and according to the explanations given to us, Subject to the paragraphs 4,5&6 and subject to Note No.4&13 regarding development expenses incurred on switched reluctance drives/clutch gear unit not written off and shown under miscellaneous expenditure and loss on impairment of assets, if any respectively, the said accounts read with the other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

i) In case of the Balance Sheet of the state of affairs of the Company as at March 31, 2010;

ii) In the case of Profit and Loss Account, of the Profits of the Company for the year ended on that date.

and

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

8) As required by the Companies (Auditors Report) Order 2003, as amended, issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 8 of our report of even date)

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

(b) We have been informed that major item of fixed asset excluding those lying with outsiders as stated in the note 3 of the accounts have been physically verified by the management as at the end of the year which in our opinion is reasonable having regard to the size of the company and nature of its business. As explained to us no material discrepancies were noticed on such verification.

(c) There is no disposal of substantial part of fixed assets during the year.

(ii)

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

(b) In our opinion and according to the information and explanation given to us, procedure for Physical verification of stock followed by the company are reasonable and adequate in relation to the size of the company and nature of its business.

(c) The Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification of inventory with the book records.

(iii)

(a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act.

(b) The Company has taken interest free loan from Directors and the maximum amount / outstanding balance at the year end is Rs.75.58 Lakhs. The Terms and conditions of the above loan is not prima facie prejudicial to the interest of the company. The company is not regular in payment of principal amount. However, steps are taken by the company to repay them at the earliest.

(iv) In our opinion the existing internal control system with regard to the purchase of inventory, fixed assets and for the sale of goods and services has to be streamlined.

(v) To the best of our knowledge and belief, and according to the information and explanations given to us, we are of opinion that the transactions that need to be entered into the register in pursuance of section 301 of the Companies Act, 1956 have been so entered;

(vi) In our opinion, and according to the information and explanation given to us the company has not accepted any deposits from the public.

(vii) In our opinion and according to the information and explanations given to us, the company is yet to install internal audit system.

(viii) We have been informed by the Management that no cost records have been prescribed u/s.209(1 )(d) of the Companies Act, 1956 in respect of products manufactured by the company except for automobiles, since the company has ceased production of automobiles.

(ix)

(a) The Company is generally regular in depositing undisputed statutory dues of Provident Fund, Employees State Insurance, Sales Tax, Service Tax etc. with the appropriate authorities. According to the information and explanation given to us there are no undisputed arrears of statutory dues which were outstanding for more than six months as on 31.3.2010.

(b) According to the information and explanations given to us, salestax dues amounting to Rs. 1045287 as per salestax amnesty scheme is yet to be paid pending receipt of orders from Sales Tax Department.

(ix) The accumulated losses of the company at the end of the financial year 31.3.2010, is less than 50% of its net worth. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(x) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution and bank.

(xi) During the year the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) The provisions of special statute applicable to chit fund, Nidhi/Mutual Benefit fund/ societies are not applicable to the Company.

(xiii) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xiv) The Company has not given guarantee for loans taken by others from bank or financial institutions.

(xv) According to the information and explanations given to us and on an overall examination of the source and application of the funds of the company, we report that no funds raised on short term basis has been used for long term investments.

(xvi) The company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act 1956.

(xvii) In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report.

(xviii) During the year covered by our audit report, the Company has not raised any money by public issues.

(xix) To the best of knowledge and belief and according to the information and explanations given to us, no frauds on or by the company has been noticed or reported during the year.



For VASU&JAGAN ASSOCIATES

Chartered Accountants

K. SIVARAAMAKRISHNAN

COIMBATORE Partner

02.9.2010 Membership No. 24374