Auditor Report of EL Forge Ltd.

Mar 31, 2025

01. Entity, Financial Statements, period, etc.

I have audited the accompanying Financial Statements of El Forge Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including Other Comprehensive Income) for the year then ended, the Statement of Changes in Equity, the Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of the Major accounting policies and other explanatory information (hereinafter referred to as ‘‘the Financial Statements’’).

02. Opinion.

In my opinion and to the best of my information and according to the explanations given to me, the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its Profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

03. Basis for Opinion

(01) I conducted my audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act.

(02) My responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section (or in a separate Annexure to) of my report.

(03) I am independent of the Company, in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to my audit of the financial statements under the provisions of the Act and the Rules made there under, and I have fulfilled my other ethical responsibilities in accordance with these requirements and the Code of Ethics.

(04) I believe that the audit evidence, obtained by me, is sufficient and appropriate to provide a basis for my opinion.

04. Key Audit Matters

(01) Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

(02) Based on the examination of books of account and explanations provided to me, I am of the opinion that there are no materially significant key audit matters that requires disclosure in this report.

05. Information Other than the Financial Statements and Auditor’s Report thereon

(01) The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Board’s report but does not include the financial statements and my auditor report thereon.

(02) My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

(03) I have nothing to report in the above regard, for the year under report.

06. Responsibilities of Management and those charged with governance for the Financial Statements

(01) The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

(02) The aforesaid responsibility also includes

(a) 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;

(b) Selection and application of appropriate implementation and maintenance of accounting policies;

(c) Making judgments and estimates that are reasonable and prudent; and

(d) Design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

(04) The Board of Directors is also responsible for overseeing the company’s financial reporting process.

07. Responsibilities of Management in respect of Audit trail (edit log) facility in respect of accounting software

Pursuant to the Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, the management is responsible for effective implementation of the requirements prescribed by the aforesaid accounts Rules. As per the aforesaid Rules, the responsibility of the Management, in respect of the books of account and other relevant books and papers maintained in electronic mode [from the financial year commencing on or after the 1st day of April, 2023], includes:

(01) To ensure the accounting software has audit trail feature

(02) To ensure that audit trail captures changes to each and every transaction

(03) To ensure that audit trail feature is always enabled

(04) To Ensure that audit trail is enabled at database level for logging any direct data changes

(05) To ensure that audit trail is appropriately protected from any modification

(06) To ensure that audit trail is retained as per statutory requirements for record retention

08. Auditor’s Responsibilities for the Audit of Financial Statements

(01) My objectives are to obtain reasonable assurance about whether the Financial Statements, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

(02) A further description of the auditor’s responsibilities for the audit of the Financial Statements is included in Annexure-01. This description forms part of my auditor report.

09. Report on Other Legal and Regulatory Requirements

(01) As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, I give in the Annexure 02, a statement on the matters specified in the paragraph 3 and 4 of the order.

(02) In continuation of the above and as required by Section 143(3) of the Act, I report that:

(a) I have sought and obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of my audit.

(b) In my opinion, proper books of account, as required by law, have been kept by the Company so far as it appears from my examination of those books [As explained to me, the company does not have any branch, either in India or outside India].

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

(d) In my opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to my separate Report in Annexure 03.

(03) With respect to the other matters to be included in the Auditor’s Report in accordance Section 143 (3) (j) of the Act, read with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in my opinion and to the best of my information and according to the explanations given to me: (a) Relating to Pending Litigation [ Clause 11(a) of the aforesaid Rule]

The company has not disclosed the impact, if any, of pending litigations on its financial position in its financial statement, since no pending litigations shall have an impact on the financial position of the Company.

(b) Relating to Long term contracts including derivative contracts [ Clause 11(b) of the aforesaid Rule]

The company has not made any provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts, since the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

(c) Relating to Investor Education and Protection Fund [ Clause 11(c) of the aforesaid Rule]

There has been no amount requiring to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2025.

(d) Funds advanced/ received and Ultimate Beneficiaries [ Clause 11 (e) (i) to (iii) of the aforesaid Rule]

(A) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(B) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(C) Based on such audit procedures considered reasonable and appropriate in the circumstances, nothing has come to my notice that has caused me to believe that the representations under the aforesaid sub-clause (i) and (ii) Rule 11(e) of the Companies (Audit and Auditors) Rules, 2014 contain any material misstatement [i.e., Paragraph 09(03)(d)(A) and (B) of this report].

(e) Payment or declaration of the dividend [ Clause 11(f) of the aforesaid Rule] Reporting of payment or declaration of the dividend, during the year by the company, in compliance with section 123 of the Act, is not applicable, since no dividend has been declared or paid during the year under report.

(f) With respect to the matters to be included in the Auditor’s Report in accordance with requirement of Section 197(16) of the Act, as amended, relating to Remuneration to Directors:

In my opinion and to the best of my information and according to the explanations given to me, the remuneration paid, during the current year by the Company to its directors, is in accordance with the provisions of Section 197 of the Act.

(g) Audit trail (edit log) facility in respect of accounting software

In pursuance of the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software, having the feature of recording audit trail (edit log) facility, applicable to the Company with effect from the Financial Year beginning from April 1, 2023, and based on my examination which included test checks, I report that the company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of my audit, I did not come across any instance of audit trail feature being tampered with.

D. Venkatesan (Membership No.: 026465)

Chartered Accountant UDIN: 25026465BMKYAB8859 Place: Chennai.

Date: 21/05/2025

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Mar 31, 2024

To the Members of El Forge Limited [CIN: L34103TN1934PLC000669]

01. Entity, Financial Statements, period, etc.

I have audited the accompanying Financial Statements of El Forge Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income) for the year then ended, the Statement of Changes in Equity, the Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of the Major accounting policies and other explanatory information (hereinafter referred to as ‘‘the Financial Statements’ ’).

02. Opinion.

In my opinion and to the best of my information and according to the explanations given to me, the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, its Profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

03. Basis for Opinion

(01) I conducted my audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act.

(02) My responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report.

(03) I am independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to my audit of the financial statements under the provisions of the Act and the Rules made there under, and I have fulfilled my other ethical responsibilities in accordance with these requirements and the Code of Ethics.

(04) I believe that the audit evidence obtained by me is sufficient and appropriate to provide a basis for my opinion.

04. Emphasis of Matter

I draw attention to the note No. 05.15, in respect of writing off of the liabilities (Shown as extraordinary items in the Statement of Profit & Loss) and my opinion is not modified in respect of the above said matters.

05. Key Audit Matters

(01) Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

(02) I have determined the matters described below to be the key audit matters to be communicated in my report. I have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the Financial Statements of my report, including in relation to these matters. Accordingly, my audit included the performance of procedures designed to respond to my assessment of the risks of material misstatement of the Financial Statements. The results of my audit procedures, including the procedures performed to address the matters below, provide the basis for my audit opinion on the accompanying Financial Statements.

Key Audit Matters		How was the matter addressed in my audit
01. Impairment of	non-financial	01. My audit procedures in relation to impairment
assets		assessment included, but not limited to the following: (01) Obtained an understanding of the management process for identification of possible impairment indicators and process performed by the management for impairment testing and the management process of determining the Value-in- Use (VIU); (02) Obtained and assessed the management’s impairment assessment computation by testing the underlying assumptions used in determining the cash flow projections and VIU; (03) Had a discussion with the management on the underlying key assumptions used for cash flow projections and discount rate, considering evidence available to support these assumptions and my understanding of the business; (04) Tested the arithmetical accuracy of the cash flow projections; and (05) Evaluated the appropriateness and adequacy of the disclosures made in the Financial Statements with respect to impairment of non-financial assets.

06. Information Other than the Financial Statements and Auditor’s Report thereon

(01) The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Board’s report but does not include the financial statements and my auditor report thereon.

(02) My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

(03) I have nothing to report in the above regard, for the year under report.

07. Responsibilities of Management and those charged with governance for the Financial

Statements

(01) The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

(02) The aforesaid responsibility also includes

(a) 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;

(b) Selection and application of appropriate implementation and maintenance of accounting policies;

(c) Making judgments and estimates that are reasonable and prudent; and

(d) Design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

(04) The Board of Directors is also responsible for overseeing the company’s financial reporting process.

08. Responsibilities of Management in respect of Audit trail (edit log) facility in respect of accounting software

The responsibility of the Board, in respect of the books of account and other relevant books and papers maintained in electronic mode, the Books of Accounts (available in the software) shall remain accessible in India, at all times so as to be usable for subsequent reference; and the accounting software has a feature of recording audit trail [from the financial year commencing on or after the 1st day of April, 2023] of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

09. Auditor’s Responsibilities for the Audit of Financial Statements

(01) My objectives are to obtain reasonable assurance about whether the Financial Statements, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

(02) A further description of the auditor’s responsibilities for the audit of the Financial Statements is included in Annexure-01. This description forms part of my auditor report.

10. Report on Other Legal and Regulatory Requirements

(01) As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, I give in the Annexure 02, a statement on the matters specified in the paragraph 3 and 4 of the order.

(02) In continuation of the above and as required by Section 143(3) of the Act, I report that:

(a) I have sought and obtained all the information and explanations which to the best of

my knowledge and belief were necessary for the purposes of my audit.

(b) In my opinion, proper books of account, as required by law, have been kept by the Company so far as it appears from my examination of those books [As explained to me, the company does not have any branch, either in India or outside India].

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

(d) In my opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on 31 -03 -2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31-03-2024 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to my separate Report in Annexure 03.

(03) With respect to the other matters to be included in the Auditor’s Report in accordance Section 143 (3) (j) of the Act, read with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in my opinion and to the best of my information and according to the explanations given to me:

(a) Relating to Pending Litigation [ Clause 11(a) of the aforesaid Rule]

The company has not disclosed the impact, if any, of pending litigations on its financial position in its financial statement, since no pending litigations shall have an impact on the financial position of the Company.

(b) Relating to Long term contracts including derivative contracts [ Clause 11(b) of the aforesaid Rule]

The company has not made any provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts, since the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

(c) Relating to Investor Education and Protection Fund [ Clause 11(c) of the aforesaid Rule]

There has been no amount requiring to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2024.

(d) Funds advanced/ received and Ultimate Beneficiaries [ Clause 11(e) (i) to (iii) of the aforesaid Rule]

(A) The management has represented that, to the best of it’s knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(B) The management has represented, that, to the best of it’s knowledge and belief, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(C) Based on such audit procedures considered reasonable and appropriate in the circumstances, nothing has come to my notice that has caused me to believe that the representations under the aforesaid sub-clause (i) and (ii) Rule 11(e) of the Companies (Audit and Auditors) Rules, 2014 contain any material misstatement [i.e., Paragraph 10(03)(d)(A) and (B) of this report].

(e) Payment or declaration of the dividend [ Clause 11(f) of the aforesaid Rule]

Reporting of payment or declaration of the dividend, during the year by the company, in compliance with section 123 of the Act, is not applicable, since no dividend has been declared or paid during the year under report.

(f) With respect to the matters to be included in the Auditor’s Report in accordance with requirement of Section 197(16) of the Act, as amended, relating to Remuneration to Directors:

In my opinion and to the best of my information and according to the explanations given to me, the remuneration paid, during the current year by the Company to its directors, is in accordance with the provisions of Section 197 of the Act.

(g) Audit trail (edit log) facility in respect of accounting software

In pursuance of the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software, having the feature of recording audit trail (edit log) facility, applicable to the Company with effect from the Financial Year beginning from April 1, 2023, and based on my examination which included test checks, I report that the company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of my audit, I did not come across any instance of audit trail feature being tampered with.

D. Venkatesan (ICAI M. No.: 026465)

Chartered Accountant

UDIN: 24026465BKDBGK7236

Place: Chennai.

Date: 24-05-2024

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Mar 31, 2015

We have audited the accompanying standalone Financial Statements of EL Forge Limited ('the Company') which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year ended 31st March, 2015 and a summary of significant accounting policies and other explanatory information.

02. Management's Responsibility for the Financial Statements

The Board of Directors of the Company is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position 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 the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

03. Auditor's Responsibility

(01) 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.

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

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

04. Emphasis Matters

Without qualifying our opinion, we draw the attention to the following

(01) Item No.12 (Relating to Non-Disclosure of details under Employees Benefit) AS-15 (reversed) in Note 28 on Financial Statements, Non-Payment of contribution to Employees Gratuity Plan agreed upon with Life Insurance Corporation of India, amounting to Rs. 207.29 Lakh (as at 31-03-2015), amount determined based on the information available with the Company. Further no Actuarial Valuation report has been obtained by the company. Accordingly, the disclosure under AS-15, namely, Employees' Benefit has not been made and no amount has been charged to Statement of Profit & Loss on account of actuarial gain or loss.

(02) Item No 13 (Relating to Penalty and Interest) in Note 28 on Financial Statements, Interest & penalty leviable, if any, for non remittance of statutory dues, on account of delay / short remittance of statutory dues is not ascertainable at present.

(03) The deferred revenue expenses and deferred interest amounting to Rs.332.75 lakh and Rs.1202.28 lakh respectively, has not been charged to Statement of Profit and Loss but shown as assets, under the grouping Non-Current Assets, please refer Item No.06 in Note No. 28 on Financial Statements.

(04) The company has obtained bank loans, both long terms and short term, from various banks, under consortium. On the basis of our examination and according to the information and explanation given to us, we are of the opinion that during the year the company has defaulted in repayment of dues to the banks. A few banks (Assignor) have assigned their loan amounts (Along with their rights, claims, benefits, etc.) to two Asset Reconstruction Companies (ARC'S), invoking the option under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Based on the information available with the company, the amount due to the Assignor has been transferred to and is shown in the respective name of the ARC'S, under the grouping Secured Loans, Long Term Borrowings, or the case maybe, Short Term Borrowings. Accordingly, the company has not shown the amount defaulted to Assignor, just before assignment, under the Note No.04 (01), on Financial Statements, regarding default of the Loan and other related details. However, the amount due to the remaining banks continues to be shown and the amount defaulted is Rs. 809.30 Lakh and Rs 616.34 Lakh, towards principal and interest respectively, as at 31.03.2015.

(05) A few creditors have filed cases against the company, before the Honourable Madras High Court, under section 433 of the Companies Act, 1956, for winding up of the company. The company has taken up the matter; and it has been explained that company has been contesting the case and/ or following directions given by the Honourable Madras High Court.

(06) Item No.07 of Note No.28 on the Financial Statements, relating to diminution in the value of Investments made by the company.

(07) The company has paid all the fixed deposits which have matured and claimed; but the company has not paid the Fixed Deposits matured but not claimed. The amount of such deposits works out to Rs 104.26 Lakh, as at 31-03-2015; since the amount is due for payment, the same has been included and/ or shown under the under the grouping Current Liabilities.

(08) Shakespeare Forgings Ltd (SFL), a company incorporated in United Kingdom (UK) was a wholly owned subsidiary (WOS) of the Company. During the Financial Year under report, the UK based wholly owned subsidiary (WOS) of the company has ceased to be 100% foreign subsidiary February 2015) and has become as Associate Company (in UK) concern within the meaning of the Companies Act 2013. The books of account of the aforesaid associates company, relating to the financial year 2014-15, are yet to be audited, by the UK based Chartered Accountants. Accordingly, any adjustment relating to carrying amount as at 31-03-2015 of the investment, made by the Company in SFL, will be determined and accounted based on the audited financial statements. We also invite your attention to Item No.18 in Note No.28 on Financial Statements

(09) As said at the beginning of the paragraph, we have not qualified or modified our opinion on the aforesaid matters, including their impacts, on the Financial Statements.

05. Basis for Qualification of Opinion:

(01) Going Concern:

(a) The Company's operating results has been materially affected due to various factors during earlier years and also during the financial year ended 31st March, 2015, under report, and the Company has huge accumulated losses as on the aforesaid date, which has eroded the entire net worth of the company. Accordingly, the appropriateness of the going concern assumption is dependent on the Company's ability to establish consistent profitable operations as well as raising, obtaining or infusing adequate/ required fund to meet its short term and long term obligations

(b) At the end of the Financial Year 2014-15, net worth of the company has been totally eroded and become negative of an amount of minus Rs.5009.92 Lakh [ (01) after excluding amount of (a) Rs.1219.03 Lakh shown under capital Reserve (other than share premium) in the Notes 02, Reserves and Surplus, on Financial Statements; (in other words, this capital reserve has not been considered as part of reserve, Since it has been created on account of revaluation of fixed Assets/ conversion of fixed assets into stock in-trade); (b) Rs.1535.56 Lakh, relating to Deferred Interest and Deferred Revenue Expenses (Since in our opinion, these items are not an asset that can be realized, in the ordinary course of business, but only can be written off or charged as an expense), Note 12, Other Non-Current Assets, on Financial Statements; and (02) further accumulated loss of the Company amounting to Rs. 8981.89 Lakh (which includes Current year loss) as on the Balance Sheet date; in other words, the accumulated loss has also been considered to determine the net worth (This loss, i.e., deficit, has already been set off with available Surplus and shown as a overall negative figure in the Financial Statement) ].

(c) Further, the Company's Current Liabilities (as at 31st March, 2015) have also exceeded its Current Assets by an amount of Rs. 5723.54 Lakh. These factors also raise doubts about the ability of the Company to continue as a going concern.

(d) In case the going concern concept is vitiated, necessary adjustments will be required on the carrying amount of Assets and Liabilities (as at 31st March, 2015) which are not ascertainable, at this stage.

(02) Change in the Method of accounting

With effect from the Financial Year 2013-14 (Comprising a period of 9 months), the company has changed the method of accounting of Interest on Bank Borrowings (both short term and long term borrowings) from mercantile method to cash method. Accordingly, an amount (as determined by the management, based on the information available with them, and relied upon by the auditors) of Rs.1590.99 Lakh, relating to 12 months, comprising the period from April, 2014 to March, 2015 (i.e., Current Financial Year under report) has not been provided in the books of account and the same has not been charged as an expense in the Statement of Profit and Loss Account for the year under report. Had the aforesaid interest been provided, as per the earlier method of accounting, consistently followed by the company, the operating loss, for the year under report, would have been more by an amount of Rs.1590.99 Lakh and the Net worth, as at March 2015, of the company would have been less by an amount (or in other words, the minus figure of the net worth would be more by the amount of Rs.2641.82 Lakh (including the non-provided amount of Rs.1050.83 Lakh relating to earlier financial year 2013-14). In our opinion, the method of accounting the aforesaid Bank Interest, is not in accordance with the provisions of Sections 128, 129 and 134 of the Companies Act, 2013 read with Companies (Accounts) Rules 2014.

06. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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, the Loss for the year ended on that date and the cash flows for the year ended on that date.

07. Reason for Qualification

As required by Section 143(4) of the Companies Act, 2013, we give following reasons for the qualification (i.e., modified opinion) made by us on the aforesaid financial Statements.

(01) Regarding Going Concern

(a) The company has been incurring loss for the last 7 consecutive (immediately preceding) financial years, and has huge accumulated loss. The net worth of the company has become negative. The company is not in a position to meet its financial obligations.

(b) Accordingly, we are of the view that preparing the financial statements on going concern basis may not be relevant. Hence, we have qualified the same. However, we are not in a position to quantify the same, since the impact of the above could not be ascertainable as on the date.

(02) Regarding change in the accounting method:

(c) Section 128(1) of the Companies Act, 2013 requires that books of account of a company should be kept on accrual basis and according to the double entry system of accounting. Section 134(2)(c) and Section 134(5) of the Companies Act, 2013 cast a responsibility on the Board to include, in the Directors' Report, among other matter, "Directors' Responsibility Statement", in relating to the Financial Statements. Accordingly, selection of the method of accounting (including changing one method to another method) and following such methods, adopting proper accounting policies and procedures are the primary responsibility of the management of the company. Considering the statutory obligation rest with the Management of the Company, the reason advanced by the management in the above regard has been considered by us and included in the following paragraphs, regarding the change in the method of accounting.

(d) In continuation of the above, for the two financial years [Namely current financial year 2014-15 (a period of 12 months comprising of the months from 01-04-2014 to 31-03-2015) & 2013-14 (a period of 9 months comprising of the months from 01-07-2013 to 31-03-2014), the company has not paid any amount towards Bank Interest, since the company has acute financial constraints, in meeting its short term and long term obligations; accordingly the company has not charged any interest (Expenses) on the bank borrowings (both Long Term and Short Term) obtained by the company from the banks. Considering the overall level of the financial position of the Company, during the financial year 2013- 14, and as a prudent measure, the company decided to change method of accounting of expenses (Interest on bank borrowings) from Mercantile Method (Accrual Basis) to Cash Method (Cash Basis), with effect from the Financial Year 2013-14 and continued the same for the current financial year 2014- 15 also.

(e) In our opinion, the above practice is not in accordance with the provisions of the Companies Act 2013. Hence, we have qualified the same together with the amount involved thereof.

08. Report on other Legal and Regulatory Requirements

(01) As required by the Companies (Auditor's Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, and the basis of the such verification of books and records of the company, as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable, to the company for the year under report.

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

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

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

(c) The report on the accounts of the branch offices, as required by clause (c) of sub-section (8) of section 143 of the Act, is not applicable for the year under report, since Company has not appointed any branch auditor, to audit the branch accounts, and accordingly dealing with the report of Branch Auditors, in preparing our report does not arise;

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

(e) Subject to the our observations, in the aforesaid paragraph, relating to basis for qualified opinion, 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.

(f) On the basis of written representations received from the directors as on 31-03-2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31-03-2015, from being appointed as a director in terms of Section 164(2) of the Act.

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

(A) The company has disclosed the impact of all the pending litigations on its financial position in its financial statement; please refer Item No.04 and 15 of Note No.28 on Financial Statements

(B) The company does not have any long term contracts including derivative contracts, which will have foreseeable material loss;

(C) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company, except in the case of the Financial Year 2007- 08, amounting to Rs.3.74 Lakh; please refer Item No 16 of Note No.28 on Financial Statements, relating to Investor Education and Protection Fund

Annexure to the Independent Auditor's Report on the Financial Statements (Standard alone) Addressed to the Members of El Forge Limited, CIN: L34103TN1934PLC000669)

[Referred in Paragraph 08(01) of the aforesaid Auditors' Report]

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 Companies Act, 2013 and on the basis of such checks as we considered appropriate, we further state, on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable, that:

01. Clause 3(i) of the Order, relating to Fixed Assets

(01) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(02) The Management has the policy of physical verification of fixed assets once in every two years, which is, in my opinion, reasonable intervals, considering the nature of fixed assets and size of the company. Accordingly, the Management has carried out physical verification of these fixed assets at the year end;

(03) No material discrepancies were noticed by the Management on such physical verification; and

(04) Considering the observations made in the aforesaid sub-paragraph, the remaining part of the Clause of the Order, relating to "Whether the same (i.e., material discrepancies) have been properly dealt with in the books of account" is not applicable to the Company for the year under report; and accordingly, we have not made any observation thereon.

02. Clause 3(ii) of the Order, relating to Inventory

(01) The Management has the policy of physical verification of Inventories once in every year, which is, in our opinion, a reasonable interval, considering the nature of inventories, volume of the inventories, nature of business and size of the Company. Accordingly, the Management has carried out physical verification of these inventories at the year end;

(02) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business;

(03) The remaining part of the Clause of the Order, relating to "Reporting of inadequacies in procedures of physical verification of inventory" is not applicable for the year under report; and accordingly, we have not made any observation thereon.

(05) The company is maintaining proper records of Inventories;

(06) No material discrepancies were noticed by the Management on such physical verification; and

(07) Considering the observations made in the aforesaid sub-paragraph, the remaining part of the Clause of the Order, relating to "Whether the same (i.e., material discrepancies) have been properly dealt with in the books of account" is not applicable to the Company for the year under report and accordingly, we have not made any observation thereon.

03. Clause 3(iii) of the Order, relating to Loans Granted

(01) The Company has not granted, during the year under report, any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(02) Considering the observations made in the aforesaid sub-paragraph, the remaining part of the Clause of the Order, given below, is not applicable to the Company for the year under report.

(a) Whether receipt of the principal amount and interest are also regular; and

(b) If overdue amount is more than Rupees One Lakh, whether reasonable steps have been taken by the Company for recovery of the principal and interest

(03) Accordingly, we have not made any observation, relating to the above.

04. Clause 3(iv) of the Order, relating to internal control system

(01) We are of the opinion that there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

(02) The remaining part of the Clause of the Order, relating to "Whether there is a continuing failure to correct major weaknesses in internal control system" is not applicable to the company for the year under report; and accordingly, we have not made any observation in this regard.

05. Clause 3(v) of the Order, relating to Deposits

In our opinion and according to the information and explanations given to us, the Company has accepted deposit from the public to which the directives issued by the Reserve bank of India, provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules, 1975 are applicable. The company has filed details of deposits, in the prescribed form, with Registrar of Companies, Tamil Nadu, at Chennai, as required by the companies Act, 2013, relating to the aforesaid deposits. The company has paid all the fixed deposits which have been matured and claimed; but the company has not paid the Fixed Deposits matured but not claimed. The amount of such deposits works out to Rs 104.26 Lakh, as at 31-03-2015; since the amount is due for payment the same has been included and/ or shown under the under the grouping Current Liabilities in the Balance Sheet. The company has not made any amount as are required to be kept as liquid assets in respect of public deposit, since they are due now and not going to mature in the ensuing financial year. Further, according to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, on the Company in respect of deposits accepted.

01) As required by Paragraph 4 of the order, we give reason for our unfavorable or qualified remarks (Answers):

02) The company has not repaid the amount of deposits outstanding and falls due. Hence, we have qualified the same together with the amount remaining unpaid.

06. Clause 3(vi) of the Order, relating to Cost Records

The company has maintained pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013. We have broadly reviewed the aforesaid cost records, maintained by the Company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

07. Clause 3(vii) of the Order, relating to Statutory Dues

(01) Unpaid undisputed amount:

(a) As per the records examined by us, the company is not regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax etc., with the appropriate authorities. As per the records examined by us, an amount of Rs 311.76 Lakh has been outstanding towards statutory dues, as at the last day of the financial year under report, for a Period of more than six months from the date they became payable.

(b) As required by Paragraph 4 of the order, we give reason for our unfavourable or qualified remarks (Answers):

Since the company has not paid the undisputed statutory dues, even though they are due, we have qualified the same together with the amount, as per the aforesaid clause of the Order.

(02) As at the end of the financial period under report, no undisputed amount of income tax / sales tax / Wealth tax / Service Tax / Custom duty / Excise duty / Cess has been outstanding except those, given below:

Sl. Nature of the Statue Nature of the dues Amount No (Rs. In Lacs)

1 ESI ESI Contribution 2.08

2 Income Tax Income Tax Demand 0.03

3 Income Tax Income Tax Demand 75.60

4 The Service Tax Service Excise Demand 24.77

5 The Central Excise Excise 1.47 Demand

6 The Central Excise Excise Demand 1.72

7 The Central Excise Excise Demand 5.22

8 The Central Excise Excise / Demand 8.49

Name of the Status Year to which the Forum where dispute amounts relates is pending

ESI Year – 2001 Employees Insurance court, Chennai

Income tax Assessment Year CIT Appeals, Chennai 2004 – 05

Income tax Assessment Year CIT Appeals, Chennai 2007 – 08

The Service Tax 2002 – 03 Commissioner Appeals of Central Excise & to Service Tax, Chennai 2010 – 11

The Central Excise 2003 – 04 to Commissioner of Central Excise Chennai IV 2006 -07 Commissionerate

The Central Excise 2002 to 2005 Customs, Excise and Service Tax Appellate Tribunal

The Central Excise 2008 – 09 Additional Commissioner of Central to Excise Div. appeal 2012 – 13 Chennai III

The Central Excise 2007 – 08 Assistance commissioner of Central Excise Chennai III

08. Clause 3(viii) of the Order, relating to Accumulated Loss

01. Unfavourable or qualified observations (Answer)

(a) Without considering the consequential effects, if any, of matter described in the Basis for Qualified Opinion paragraph of our auditors' report, the Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current and immediately preceding financial year. The company's has accumulated loss amounting to Rs. 8981.89 Lakh at the end of the financial year under report.

(b) As required by Paragraph 4 of the Order, we give reason for our unfavourable or qualified remarks (Answers): Since the company has incurred loss during the year under report and has been incurring loss during preceding years, the aggregated amount has exceed the share capital and reserves, resulting in erosion of networth more than 50% .

09. Clause 3(ix) of the Order, relating to Repayment of Loans

(01) Unfavourable or qualified observations (Answer)

(a) Out of consortium of banks, a few banks (Assignor) have assigned their loan amounts (Along with their rights, claims, benefits, etc.) to two Assets Restructuring Companies (ARC), invoking the option under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Based on the information available with the company, the amount due to the Assignor has been transferred to and shown in the respective name of the ARC. Accordingly, the amount assigned by the Assignor, no longer appears in the name of the bank; these amount have been excluded for the purpose of this clause;

(b) In continuation of the above, based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has defaulted in repayment of dues to financial institutions / banks amounting to Rs 809.29 Lakh and Rs. 616.33 Lakh towards principal and interest respectively as at 31.03.2015

(02) As required by Paragraph 4 of the Order, we give reason for our unfavourable or qualified remarks (Answers): As per the information and explanations given to us, the company has not entered into any agreement with ARC, hence it is not possible to classify the amount, in terms of the requirement of Schedule III to the Companies Act, 2013. Hence, the aforesaid observation.

10. Clause 3(x) of the Order, relating to Guarantee

01. Unfavourable or qualified observations (Answer)

a. The company has given a guarantee, much earlier to the 12-09-2013, the date from which Section 185 of the Companies Act, 2013 has come into force for loans taken by a domestic company from its banker. The domestic company is not in a position to repay the loan amount to its Banker. Their Banker issued notice under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Considering the aforesaid fcats, in our opinion, the guarantee given is prejudicial to the interest of the company.

b. As required by Paragraph 4 of the Order, we give reason for our unfavourable or qualified remarks (Answers): In the aforesaid circumstance, as it appears to us, the guarantee could be invoked by the banker at any time; hence we considered the same as prejudicial to the interest of the Company.

11. Clause 3(xi) of the Order, relating to application of Term Loan

01. The Company has not taken any Term Loan from banks or financial institution during the year under report.

02. Regarding the Term Loan taken by the Company from bank, during the earlier years, the Company has applied such Term Loan for the purpose for which the loans were obtained.

12. Clause 3(xii) of the Order, relating to Fraud

Based on the examination of the books of account and the information and explanations/ representation given to us, no fraud on or by the company has been noticed or reported during the year under report; accordingly, remaining part of the Clause of the Order relating to "the nature and the amount involved is to be indicated" is not applicable to the company for the year under report; and accordingly, we have not made any observation, relating to the above.

For P. Rajagopalan & Co

Chartered Accountants

Regn No. of the Firm: 003408S

Place: Chennai R.VENKATESH

Date: 13.08.2015 Partner

MNo:028368

---

Mar 31, 2014

We have audited the accompanying financial statements of EL Forge Limited (''the Company'') which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the nine months ended 31st March 2014 and a summary of significant accounting policies and other explanatory information.

02. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (''the Act'') [which (i.e., Accounting Standards) continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs]. 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 misstatements, whether due to fraud or error.

03. Auditor''s Responsibility

(01) 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.

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

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

04. Emphasis Matters

Without qualifying our opinion, we draw the attention to the following

(01) Item No II-21 in Note 26 on Financial Statements, Interest & penalty leviable, if any, for non- remittance of statutory dues, on account of delay / short remittance of statutory dues is not ascertainable at present.

(02) Item No.II-20 in Note 26 on Financial Statements, Non-Payment of contribution to Employees Gratuity Plan agreed upon with Life Insurance Corporation of India, amounting to Rs. 96.30 Lakh, as per the amount determined based on the information available with the Company. Accordingly, the disclosure under AS-15, namely, Employees'' Benefit has not been made.

(03) Item No.II-24 in Note 26 on Financial Statements, relating to change in the accounting period and accordingly the accounting period, under report, is for a period of 9 month, from 1st July, 2013 to 31st March, 2014, as against a period of 12 months (1st July, 2012 to 30h June 2013) during the immediately preceding previous Period.

05. Basis for Qualification of Opinion

(01) The Company''s operating results has been materially affected due to various factors during the nine months ended 31st March, 2014, under report, and the Company has huge accumulated losses as on the aforesaid date, which has eroded entire net worth of the company. Accordingly, the appropriateness of the going concern assumption is dependent on the Company''s ability to establish consistent profitable operations as well as raising, obtaining or infusing adequate/ required fund to meet its short term and long term obligations.

(02) At the end of the financial Period 2013-14, net worth of the company has been totally eroded and become negative of an amount of minus Rs.3162.65 Lakh [after excluding amount of Rs. 1219.03 Lakh shown under capital Reserve (other than share premium; in other words, this capital reserve has not been considered as part of reserve due to revaluation) in the Notes 02 on Financial Statements; Rs.1535.56 Lakh, relating to Deferred Interest and Deferred Revenue Expenses (Since in our opinion, this is not an assets that can be realized, in the ordinary course of business but only can be written off), Note 12 on Financial Statements, due to accumulated loss of the Company amounting to Rs. 7134.63 Lakh (which includes Current Period loss) as on the Balance Sheet date].

(03) Further, the Company''s Current Liabilities (as at 31st March, 2014) have also exceeded its Current Assets by an amount of Rs. 6667.30 Lakh. These factors also raise doubts about the ability of the Company to continue as a going concern.

(04) In case the going concern concept is vitiated, necessary adjustments will be required on the carrying amount of Assets and Liabilities which are not ascertainable (as at 31st March, 2014), at this stage.

(05) During the Period under report, the company has changed the method of accounting of Interest on Bank Borrowings (both short term and long term borrowings) from mercantile method to cash method. Accordingly, an amount (as determined by the management, based on the information available with them, and relied upon by the auditors) of Rs.1050.83 Lakh, relating to 9 months, comprising the period from July 1, 2013 to March, 2014, has not been provided in the books of account and the same has not been charged as an expense in the Statement of Profit and Loss Account under report. Had the aforesaid interest been provided, as per the earlier method of accounting, consistently followed by the company, the operating loss, for the period under report, would have been more by an amount of Rs.1050.83 Lakh and the Net worth, as at March 2014, of the company would have been less by an equal amount (or in other words, the minus figure of the net worth would be more by the same amount).

06. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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.

(01) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(02) In the case of the Statement of Profit and Loss, of the Loss for the Period ended on that date; and

(03) In the case of the Cash Flow Statement, of the cash flows for the Period ended on that date.

07. Report on other Legal and Regulatory Requirements

(01) As required by the Companies (Auditors Report)order, 2003(''the Order''), as amended, 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.

(02) 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 and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) The report on the accounts of the branch offices, as required by clause (c) of sub-section (3) of section 228, is not applicable for the Period under report, since the company has not appointed any branch auditor for the Period under report and accordingly dealing with the report of Branch Auditors, in preparing our report, does not arise;

(e) Except for the matters described in Emphasis matters and the Basis for Qualified Opinion paragraphs above, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section(3C) of Section 211 of the Act [which (i.e., Accounting Standards) continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs]; and

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT ON THE FINANCIAL STATEMENT (Referred in paragraph 07(1) of our report of even date) The Members of EL Forge Limited

01. Fixed Assets: -

(01) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(02) As explained to us, all the fixed assets have been physically verified by the management at once in a Year, which in our opinion is reasonable, having regard to the size of the company and the nature of the fixed assets; material discrepancies were not noticed on such physical verification;

(03) In our opinion, substantial part of fixed assets have not been disposed off during the Period, and the going concern status of the company is not affected.

02. Inventories: -

(01) As explained to us, the management of the company has conducted physical verification of inventories at reasonable intervals.

(02) In our opinion and based on the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business; and

(03) The company has maintained proper records of inventories; and as explained to us, material discrepancies were not noticed on such physical verification.

03. Loan, either granted or taken, secured or unsecured to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956:-

(01) Loans Granted

(a) The company has not granted any loan, secured/ unsecured to parties covered in the register maintained under Section 301 of the Companies Act 1956.

(b) Accordingly, the remaining part of the clause of the Order, namely (01) whether the rate of interest and other terms and conditions of the loan are, prima facie, prejudicial to the interest of the company; (02) whether receipt of principal and interest are regular; and (03) whether reasonable steps have been taken by the company, if the overdue amount is more than Rupees one Lakh, is not applicable to the company, for the Period under report;

(02) Loans taken

(a) The company has taken unsecured loans (Fixed Deposit Accepted) from companies/ firms/ other parties covered in the register maintained under Section 301 of the Companies Act 1956. The details of number of the parties and amount involved, in respect of the aforesaid loan as at end of the financial Period under report, are 3 and Rs. 29.19 Lakhs respectively.

(b) In our opinion, the rate of interest and other terms and conditions of the loan are, prima facie, not prejudicial to the interest of the company; and

(c) In our opinion, payment of principal and interest are regular.

04. Internal Control: -

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and service. Further, on the basis of examination of the books and records, in accordance with auditing standards the generally accepted in India, and according to the information and explanation given to us, we have neither come across nor we have been informed of any instance of major weaknesses in internal control system; hence the question of continuing failure to correct major weakness does not arise.

05. Specified Parties Transactions: -

As per the examination of the books of account and other records, in accordance with the generally accepted auditing standards, in India, and on the basis of the information and explanations givens to us, contracts or arrangements referred to Section 301 of the Companies Act, 1956, have not been entered into by the company, during the Period under report, except the Fixed Deposits which have already been dealt with paragraph 03 above. Accordingly, the remaining part of the clause of the Order, namely, whether such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, is not applicable to the company for the Period under report.

06. Public Deposits: -

Based on our examination and according to the information and explanation given to us, we make following observations regarding deposits accepted by the company.

01) Out of the total deposit amount of Rs.140.67 Lakhs as at 31st March 2014, an amount of Rs.29.16 Lakhs remained unclaimed and unpaid after maturity period. The company has accepts fresh deposits of Rs.25 Lakhs, even though the net worth of the company has become negative as at 31/03/2014 and the appropriateness going concern concept is doubtful.

02) Subject to the above the company has compiled with the directives issued by the Reserve of india, the provisions of sections 58A, 58AA or any other relevant provisions of the companies Act, 1956 and the rules framed there under, with regard to the acceptance of deposits.

03) As explained to us, no order has been passed by the company Law Board or Nation Law Company Tribunal or Reserve Bank of India or any other court or any other Tribunal on company in respect of the deposits accepted by the company.

07. Internal Audit System: -

In our opinion, the Internal Audit carried out by a firm of chartered accountants, is commensurate with its size and nature of its business of the company.

08. Cost Records: -

We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of records with a view to determine whether they are accurate and complete.

09. Statutory Dues: -

(01) As per the records examined by us, the company is not regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax etc., with the appropriate authorities. As per the records examined by us, an amount of Rs 229.55 Lakhs has been outstanding towards statutory dues, as at the last day of the financial Period under report, for a Period of more than six months from the date they became payable.

(02) As at the end of the financial period under report, no undisputed amount of income tax / sales tax / Wealth tax / Service Tax / Custom duty / Excise duty / Cess has been outstanding except those, given below

Sl No Nature of the Nature of the Amount Statute dues ( Rs. In Lacs)

ESI 1 ESI 2.08 Contribution

Income Tax 2 Income Tax 0.03 Demand

Income Tax 3 Income Tax 75.57 Demand

Service 4 The Service Excise 24.77 Tax Demand

5 The Central Excise Excise 1.47 Demand

6 The Central Excise 4.96 Excise Demand

7 The Central Excise 1.72 Excise Demand

8 The Central Excise 4.66 Excise Demand

The Excise / 9 Central Excise 8.49 Demand

The Excise 10 Demand 1.03 Central Excise Refund



Nature of the Statute Year to which the Forum where dispute is Amount relates pending

ESI Employees Insurance court, Year -2001 Chennai

Income Tax Assessment Year CIT Appeals 2004-05 Chennai

Income Tax Assessment Year CIT Appeals 2007-08 Chennai

The Service Tax 2002- 03 Commissioner Appeals of Central Excise & Service To Tax 2010-11 Chennai

The Central Excise 2003-04 Commissioner of Central TO 2006-07 Excise Chennai IV Commissionerate

The Central Excise 2007-08 Deputy Commissioner Central Excise Tambaram II

The Central Excise Customs, Excise and Service 2005 Tax Appellate Tribunal

The Central Excise 2008-09 Additional commissioner of To Central Excise Div.appeal 2012-13 Chennai III

The Central Excise 2007-08 Assistance commissioner of Central Excise Chennai III

The Central Excise 2011-12 Commissioner of Central Excise (Appeals)

10. Net worth: -

The company''s has accumulated loss amounting to Rs. 7134.63 lakhs at the end of the financial Period under report. The company has incurred cash losses during the financial Period under report and incumed cash loss in the immediately preceding the financial Year.

11. Default in certain dues: -

Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has defaulted in repayment of dues to financial institutions / banks amounting to Rs 1680.00 Lakhs and Rs 1109.62 Lakhs towards principal and interest respectively as at on 31.03.2014.

12. Adequacy of Certain Loan Documents: -

The Clause, relating to adequacy of documents and records required to be maintained in cases where the company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the deficiencies, if any, in this regard, is not applicable to the company for the Period under report, since company has not granted any loans and advances on the basis of such securities.

13. Special Statutes

In our opinion, the company has not engaged in the activities relating to chit fund or nidhi/ mutual benefit fund/ societies, accordingly the clause requiring the matters, namely, (01) the net-owned funds to deposit liability ratio is more than 1:20 as on the date of balance sheet, (02) Compliance with the prudential norms on income recognition and provisioning against sub-standard/ default/ loss assets, (03) adequacy of procedures for appraisal of credit proposals/ requests, assessment of credit needs and repayment capacity of the borrowers, and (04) the repayment schedule of various loans granted by the nidhi is based on the repayment capacity of the borrower and would be conducive to recovery of the loan amount, is not applicable to company for the Period under report.

14. Dealing in securities

As per the records of the company, the company was not dealing/ trading in shares, securities, debentures and other investments. Accordingly, reporting the maintenance of proper records of the transactions and contracts and timely entries therein and holding of the shares, securities, debentures and other securities, in its own name except to the extent of the exemption, if any, granted under section 49 of the Companies Act, 1956, does not arise.

15. Guarantee Given

The company has given a guarantee for loans taken by its subsidiary (Wholly owned Foreign Subsidiary) company from a foreign bank and also in respect of loan taken by a domestic company from its banker. In our opinion, the terms and conditions thereof are not prejudicial to the interest of the company.

16. Term Loan Applications

As explained to us, the company has not obtained new term loans during the Period under report; and it has been further explained that the terms loans (taken in earlier Years) were applied for the purpose for which the loans were obtained.

17. Application of short funds

According to the information and explanation given to us, and an overall examination of the Balance Sheet of the company as at the end of the financial Period under report, in our opinion, the company has applied short-term fund towards long-term application, due to total erosion of net worth and excess of current liabilities over current assets.

18. Preferential Allotment

The Company has not made any preferential allotment of shares during the Period under report.

19. Securities in respect of debentures issued

The company has not issued any debentures during the Period under report and accordingly, the question, "Whether securities have been created in respect of debentures issued" does not rise.

20. Public Issue

The Company has not raised any money by way of Public Issue during the Financial Period. Hence, the question, "Whether the management has disclosed on the end use of money raised by public issue and the same has been verified", does not arise.

21. Fraud

Based on the examination of the books of account and on the information and explanations given to us, no fraud on or by the company has been noticed or reported during the Period under report; and remaining part of the clause relating to "the nature and the amount involved is to be indicated" is not applicable to the company for the period under report. For P.RAJAGOPALAN & Co

Charted Accounts

Regn No. of the Film: 003408S

Place : CHENNAI

Date : 11/08/2014 R.VENKATESH

Partner

(MNo.28368)

---

Jun 30, 2013

01. Financial Statements, their period, etc.,

We have audited the accompanying financial statements of EL Forge Limited (''the Company'') which comprise the Balance Sheet as at 30th June 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

02. Management''s Responsibility for the Financial Statements

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

03. Auditor''s Responsibility

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

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

04. Emphasis Matters

Without qualifying our opinion, we draw the attention to the following

(01) Item No f 1-21 in Note 26 on Financial Statements, Interest & penalty livable, if any, for non-remittance of statutory dues, on account of delay / short remittance of statutory dues is not ascertainable at present.

(02) Item No.ll-20 in Note 26 on Financial Statements, Non-Payment of contribution to Employees Gratuity Plan agreed upon with Life Insurance Corporation of India, amounting to Rs. 78.42 Lakh. Accordingly, the disclosure under AS-15Empioyees'' benefit has not been made.

05. Basis for Qualification of Opinion

(01) The Company''s operating results has been materially affected due to various factors during the financial year ended 30''h June 2013, under report, and the Company has accumulated losses as on the aforesaid date, which has eroded entire net worth of the company. Accordingly, the appropriateness of the going concern assumption is dependent on the Company''s ability to establish consistent profitable operations as well as raising, obtaining or infusing adequate/ required fund to meet its short term and long term obligations.

(02) At the end of the financial Year 2012-13, net worth of the company has been totally eroded and become negative of an amount of minus Rs. 2027.06 [after excluding amount of Rs. 1219.03 Lakh shown under capital Reserve (other than share premium) in the Notes 02 on Financial Statements and Rs.1535.56 Lakh, relating to Deferred Interest and Deferred Revenue Expenses, Note 12 on Financial Statements], due to the accumulated loss of the Company amounting to Rs.5999.03 Lakh (which includes Current year loss) as on the Balance Sheet date.

(03) Further, the Company''s Current Liabilities (as at 30th June 2013) have also exceeded its Current Assets by an amount of Rs. 6259.80 Lakh. These factors raise doubts about the ability of the Company to continue as a going concern.

(04) In case the going concern concept is vitiated, necessary adjustments will be required on the carrying amount of Assets and Liabilities which are not ascertainable.

06. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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.

(01) In the case of the Balance Sheet, of the state of affairs of the Company as at 30m June 2013;

(02) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

(03) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

07. Report on other Legal and Regulatory Requirements

(01) As required by the Companies (Auditors Report) Order, 2003{''the Order''), as amended, 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.

(02) 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 and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) Except for the matter described in Emphasis matters and the Basis for Qualified Opinion paragraph above, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section(3C) of Section 211 of the Companies Act, 1956; and

(e) On the basis of written representations received from the Directors, as on SO11''1 June 2013, and taken on record by the Board of Directors, none of the Directors are disqualified as on 30!h June 2013, from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

01. Fixed Assets: -

(01) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(02) As explained to us, all the fixed assets have been physically verified by the management at once in a year, which in our opinion is reasonable, having regard to the size of the company and the nature of the fixed assets; material discrepancies were not noticed on such physical verification;

(03) In our opinion, substantial part of fixed assets have not been disposed off during the year, and the going concern status of the company is not affected:

02. Inventories: -

(01) As explained to us, the management of the company has conducted physical verification of inventories at reasonable intervals.

(02) In our opinion and based on the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business; and

(03) The company has maintained proper records of inventories; and as explained to us, material discrepancies were not noticed on such physical verification;

03. Loan, either granted or taken, secured or unsecured to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956:-

(01) Loans Granted

(a) The company has not granted any loan, secured/ unsecured to parties covered in the register maintained under Section 301 of the Companies Act 1956.

(b) Accordingly, the remaining part of the clause of the Order, namely (01) whether the rate of interest and other terms and conditions of the loan are, prima facie, prejudicial to the interest of the company; (02) whether receipt of principal and interest are regular; and (03) whether reasonable steps have been taken by the company, if the overdue amount is more than Rupees one Lakh, is not applicable to the company, for the Year under report;

(02)Loans taken

(a) The company has taken unsecured loans (Fixed Deposit Accepted) from companies/ firms/ other parties covered in the register maintained under Section 301 of the Companies Act 1956. The details of number of the parties and amount involved, in respect of the aforesaid loan as at end of the financial year under report, are 3 and Rs. 2808000/= respectively.

(b) In our opinion, the rate of interest and other terms and conditions of the loan are, prima facie, not prejudicial to the interest of the company; and

(c) In our opinion, payment of principal and interest are regular.

04. internal! Control: -

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and service. Further, on the basis of examination of the books and records, in accordance with auditing standards the generally accepted in India, and according to the information and explanation given to us, we have neither come across nor we have been informed of any instance of major weaknesses in internal control system; hence the question of continuing failure to correct major weakness does not arise.

05. Specified Parties Transactions: - _

As per the examination of the books of account and other records, in accordance with the generally accepted auditing standards, in India, and on the basis of the information and explanations givens to us, contracts or arrangements referred to Section 301 of the Companies Act, 1956, have not been entered into by the company, during the year under report; except the Fixed deposits which have already been dealt with paragraph 03 above. Accordingly, the remaining part of the clause of the Order, namely, whether such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, is not applicable to the company for the Period under report.

06. Public Deposits: -

In our opinion and according to the information and explanation given to us the company has compiled with the directives issued by the Reserve Bank of India, the provision''s of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under, with regard to the acceptance of deposits from the public. As explained to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve bank of India or any other Court or any other Tribunal on Company in respect of the aforesaid deposits.

07. internal Audit System: -

In our opinion, the Internal Audit carried out by a firm of chartered accountants, is commensurate with its size and nature of its business of the company.

08. Cost Records: -

We have broadly reviewed the books of accounts relating to material, labour and other items of cost maintained by the company pursuant to the rules made by central government for the maintenance of cost records under Sec 209(1 )(d) of the companies Act, 1956, and we are of opinion that prima face the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of records with a view to determine whether they are accurate and complete.

09. Statutory Dues: - _

(01) As per the records examined by us, the company is not regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax etc. with the appropriate authorities. As per the records examined by us, an amount of Rs. 1,95,85,136/- has been outstanding towards statutory dues, as at the last day of the financial Period under report, for a period of more than six months from the date they became payable.

(02) The Details of disputed amount of Income Tax / Sales Tax / Wealth Tax / Service Tax I Custom duty / Excise Duty / Cess, are given below:

Si, No Nature of the Nature of Amount Period to Forum where Statute the dues {Rs. in which the dispute is pending Lacs) Amount relates

1. ESI ESI 2.08 Year -2001 Employees Insurance Contribution court, Chennai

2 Income Tax income Tax 0.03 Assessment CiT Appeals Demand _ Period 2004-05 Chennai

3 Income Tax Income Tax 75.57 Assessment CIT Appeals Demand Period 2007-08 Chennai

4 The Service Service 24.76 2002-03 Commissioner Tax Excise to Appeals of Central Demand 2009-10 Excise & Service Tax, Chennai

5 The Central Excise 1.47 2003-04 Commissioner of Excise Demand to Central Excise 2006-07 Chennai IV Commissiom- nerate

6 The Centrai Excise 4.36 2007-08 Deputy Commissioner Excise Demand Central Excise Tambaram H

7 The Central Excise 1.72 2001-02 Customs, Excise &

Excise Demand to Service Tax Appellate 2005-06 Tribunal

8 The Central Excise 3.60 2008-09 Assistance Excise Demand to Commissioner of 2011-12 Central Excise Div. Chennai III

9 The Central Excise / 8.49 2007-08 Assistance Excise Demand Commissioner of Central Excise Chennai ill

10. The centrai Excise 1.03 2011-12 Commissioner of Excise Demand Central Excise Refund (Appeals)

10. Net worth: -

The company has accumulated loss amounting to Rs.599903429/- at the end of the financial year under report. The company has incurred cash losses during the financial year under report and not incurred cash loss in the immediately preceding the financial year.

11. Default in certain dues: -

Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has defaulted in repayment of dues to financial institutions / banks amounting to Rs.81177375/- and Rs.42597322 towards principal and interest respectively as on 30.06.2013.

12. Adequacy of Certain Loan Documents: -

The Clause, relating to adequacy of documents and records required to be maintained in cases where the company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the deficiencies, if any, in this regard, is not applicable to the company for the Year under report, since company has not granted any loans and advances on the basis of such securities.

13. Special Statutes

In our opinion, the company has not engaged in the activities relating to chit fund or nidhi/ mutual benefit fund/ societies, accordingly the clause requiring the matters, namely, (01) the net-owned funds to deposit liability ratio is more than 1:20 as on the date of balance sheet,

(02) Compliance with the prudential norms on income recognition and provisioning against sub-standard/ default/ loss assets, (03) adequacy of procedures for appraisal of credit proposals/ requests, assessment of credit needs and repayment capacity of the borrowers, and (04) the repayment schedule of various loans granted by the nidhi is based on the repayment capacity of the borrower and wouid be conducive to recovery of the loan amount, is not applicable to company for the Year under report.

14. Dealing in securities

As per the records of the company, the company was not dealing/ trading in shares, securities, debentures and other investments. Accordingly, reporting the maintenance of proper records of the transactions and contracts and timely entries therein and holding of the shares, securities, debentures and other securities, in its own name except to the extent of the exemption, if any, granted under section 49 of the Companies Act, 1956, does not arise.

15. Guarantee Given

The company has given a guarantee for loans taken by its subsidiary company (Wholly owned Foreign subsidiary) from a foreign bank and also in respect of loan taken by a domestic company from its banker. In our opinion, the terms and conditions thereof are not prejudicial to the interest of the company,

16. Term Loan Applications

As explained to us, the company has not obtained new term loans (excluding funded interest term loans on account of corporate debts restructure) during the Year under report: and it has been further explained that the term loans (taken in earlier Year) were applied for the purpose for which the loans were obtained.

17. Application of short and long term funds

According to the information and explanation given to us, and an overall examination of the Balance Sheet of the company as at the end of the financial Year under report, in our opinion, the company has not applied short-term fund towards long-term application.

18. Preferential Allotment

The Company has not made any preferential allotment of shares to the parties covered under Sec 301 of Company Act 1956 during the year under report.

19. Securities in respect of debentures issued

The company has not issued any debentures during the financial year under report and accordingly, the question, "Whether securities have been created in respect of debentures issued" does not rise.

20. Public Issue

The Company has raised money by way of right issue to existing share holders is during the year. Hence repeating, "Whether the management has discloser on the end use of money raised by the public issue and the same has been verified", does not arise.

21. Fraud

Based on the examination of the books of account and on the information and explanations given to us, no fraud on or by the company has been noticed or reported during the Year under report; and remaining part of the clause relating to "the nature and the amount involved is to be indicated" is not applicable to the company for the Year under report.

For P. RAJAGOPALAN & Co

Chartered Accountants

Regn No. of the Firm: 003408S

PLACE: CHENNAI R. VENKATESH

DATE : 30-08-2013 Partner

(MNo. 28368)

---

Jun 30, 2012

1. We have audited the attached Balance Sheet of EL Forge Limited as at June 30, 2012, the Statement of Profit and Loss for the Year ended on that date and the Cash Flow Statement for the Year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (referred to as "the Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and the basis of the such verification of books and records of the company, as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable.

4. Further to our comments in the Annexure referred to above, we report that:

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

b. In our opinion, proper books of 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 and Profit and Loss Account dealt with by this report are in agreement with the books of account;

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

e. On the basis of written representations received from the directors, as on June 30, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on June 30, 2012 from being appointed as a director in terms of clause (g) of sub-Section (1) of Section 274 of the Companies Act, 1956; and

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

i) In the case of the Balance Sheet, of the state of the Company's affairs as at 30th June, 2012. ii) In the case of the Statement of Profit and Loss, of the Loss 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.

ANNEXURE TO AUDITORS' REPORT

(Referred in paragraph 03 of our report of even date)

To

The Members of EL Forge Limited

01. Fixed Assets: -

(01) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(02) As explained to us, all the fixed assets have been physically verified by the management at once in a year, which in our opinion is reasonable, having regard to the size of the company and the nature of the fixed assets; material discrepancies were not noticed on such physical verification;

(03) In our opinion, substantial part of fixed assets have not been disposed off during the year, and the going concern status of the company is not affected;

02. Inventories: -

(01) As explained to us, the management of the company has conducted physical verification of inventories at reasonable intervals.

(02) In our opinion and based on the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business; and

(03) The company has maintained proper records of inventories; and as explained to us, material discrepancies were not noticed on such physical verification;

03. Loan, either granted or taken, secured or unsecured to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956:- (01) Loans Granted

(a) The company has not granted any loan, secured/ unsecured to parties covered in the register maintained under Section 301 of the Companies Act 1956.

(b) Accordingly, the remaining part of the clause of the Order, namely (01) whether the rate of interest and other terms and conditions of the loan are, prima facie, prejudicial to the interest of the company; (02) whether receipt of principal and interest are regular; and (03) whether reasonable steps have been taken by the company, if the overdue amount is more than Rupees one Lakh, is not applicable to the company, for the Year under report;

(02) Loans taken

(a) The company has taken unsecured loans (Fixed Deposit Accepted) from companies/ firms/ other parties covered in the register maintained under Section 301 of the Companies Act 1956. The details of number of the parties and amount involved, in respect of the aforesaid loan as at end of the financial year under report, are 7 and Rs. 3932000/= respectively.

(b) In our opinion, the rate of interest and other terms and conditions of the loan are, prima facie, not prejudicial to the interest of the company; and

(c) In our opinion, payment of principal and interest are regular.

04. Internal Control: -

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and service. Further, on the basis of examination of the books and records, in accordance with auditing standards the generally accepted in India, and according to the information and explanation given to us, we have neither come across nor we have been informed of any instance of major weaknesses in internal control system; hence the question of continuing failure to correct major weakness does not arise.

05. Specified Parties Transactions: -

As per the examination of the books of account and other records, in accordance with the generally accepted auditing standards, in India, and on the basis of the information and explanations givens to us, contracts or arrangements referred to Section 301 of the Companies Act, 1956, have not been entered into by the company, during the year under report; except the Fixed deposits which have already been dealt with paragraph 03 above. Accordingly, the remaining part of the clause of the Order, namely, whether such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, is not applicable to the company for the Period under report.

06. Public Deposits: -

In our opinion and according to the information and explanation given to us the company has compiled with the directives issued by the Reserve Bank of India, the provision's of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under, with regard to the acceptance of deposits from the public. As explained to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve bank of India or any other Court or any other Tribunal on Company in respect of the aforesaid deposits.

07. Internal Audit System: -

In our opinion, the Internal Audit carried out by a firm of chartered accountants, is commensurate with its size and nature of its business of the company.

08. Cost Records: -

We have broadly reviewed the books of accounts relating to material, labour and other items of cost maintained by the company pursuant to the rules made by central government for the maintenance of cost records under Sec 209(1)(d) of the companies Act, 1956, and we are of opinion that prima face the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of records with a view to determine whether they are accurate and complete.

09. Statutory Dues: -

(01) As per the records examined by us, the company is not regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income tax etc. with the appropriate authorities. As per the records examined by us, an amount of Rs. 5015731/- has been outstanding towards statutory dues, as at the last day of the financial Period under report, for a period of more than six months from the date they became payable.

(02) The Details of disputed amount of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom duty / Excise Duty / Cess, are given below:

Sl.No Nature of the Nature of Amount Statute the dues (Rs. in Lacs)

1 ESI ESI 2.08 Contribution

2 Income Tax Income Tax 0.03 Demand

3 Income Tax Income Tax 75.57 Demand

4 The Service Service 25.85 Tax Excise Demand

5 The Central Excise 1.47 Excise Demand

6 The Central Excise 5.06 Excise Demand

7 The Central Excise 5.13 Excise Demand

8 The Central Excise 9.00 Excise Demand

9 The Central Excise / 7.16 Excise Interest Demand

10 The Central Excise 0.07 Excise Demand

11 The Central Excise 1.30 Excise Demand



Sl.no Period to Forum where which the dispute is pending Amount relates

1 Year -2001 Employees Insurance court, Chennai

2. Assessment CIT Appeals Period 2004-05 Chennai

3. Assessment CIT Appeals Period 2007-08 Chennai

4. 2002-03 Commissioner to Appeals of Central 2009-10 Excise & Service Tax, Chennai

5. 2003-04 Commissioner of to Central Excise 2006-07 Chennai IV Commissiomnerate

6. 2007-08 Deputy Commissioner Central Excise Tambaram

7. 2001-02 Customs, Excise & to Service Tax Appellate 2005-06 Tribunal

8. 2007-08 Assistance Commissioner of Central Excise Div. Hosur

9. 2005-06 Assistance to Commissioner of 2010-11 Central Excise Chennai III

10. 2009-10 Assistance Commissioner of Central Excise Hosur

11. 2009-10 Assistance Commissioner of Central Excise Tambaram II



10. Net worth: -

The company has accumulated loss amounting to Rs.261699675/- at the end of the financial year under report. The company has incurred cash losses during the financial year under report and not incurred cash loss in the immediately preceding the financial year.

11. Default in certain dues: -

Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has defaulted in repayment of dues to financial institutions / banks amounting to Rs.29703890/- and Rs.14119291 towards principal and interest respectively as on 30.06.2012.

12. Adequacy of Certain Loan Documents: -

The Clause, relating to adequacy of documents and records required to be maintained in cases where the company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the deficiencies, if any, in this regard, is not applicable to the company for the Year under report, since company has not granted any loans and advances on the basis of such securities.

13. Special Statutes

In our opinion, the company has not engaged in the activities relating to chit fund or nidhi/ mutual benefit fund/ societies, accordingly the clause requiring the matters, namely, (01) the net-owned funds to deposit liability ratio is more than 1:20 as on the date of balance sheet, (02) Compliance with the prudential norms on income recognition and provisioning against sub-standard/ default/ loss assets, (03) adequacy of procedures for appraisal of credit proposals/ requests, assessment of credit needs and repayment capacity of the borrowers, and (04) the repayment schedule of various loans granted by the nidhi is based on the repayment capacity of the borrower and would be conducive to recovery of the loan amount, is not applicable to company for the Year under report.

14. Dealing in securities

As per the records of the company, the company was not dealing/ trading in shares, securities, debentures and other investments. Accordingly, reporting the maintenance of proper records of the transactions and contracts and timely entries therein and holding of the shares, securities, debentures and other securities, in its own name except to the extent of the exemption, if any, granted under section 49 of the Companies Act, 1956, does not arise.

15. Guarantee Given

The company has given a guarantee for loans taken by its subsidiary company (Wholly owned Foreign subsidiary) from a foreign bank and also in respect of loan taken by a domestic company from its banker. In our opinion, the terms and conditions thereof are not prejudicial to the interest of the company.

16. Term Loan Applications

As explained to us, the company has not obtained new term loans (excluding funded interest term loans on account of corporate debts restructure) during the Year under report; and it has been further explained that the term loans (taken in earlier Year) were applied for the purpose for which the loans were obtained.

17. Application of short and long term funds

According to the information and explanation given to us, and an overall examination of the Balance Sheet of the company as at the end of the financial Year under report, in our opinion, the company has not applied short-term fund towards long-term application.

18. Preferential Allotment

The Company has not made any preferential allotment of shares to the parties covered under Sec 301 of Company Act 1956 during the year under report.

19. Securities in respect of debentures issued

The company has not issued any debentures during the financial year under report and accordingly, the question, "Whether securities have been created in respect of debentures issued" does not rise.

20. Public Issue

The Company has raised money by way of right issue to existing share holders is during the year under report.

21. Fraud

Based on the examination of the books of account and on the information and explanations given to us, no fraud on or by the company has been noticed or reported during the Year under report; and remaining part of the clause relating to "the nature and the amount involved is to be indicated" is not applicable to the company for the Year under report.

For P. RAJAGOPALAN & Co

Chartered Accountants

Regn No. of the Firm: 003408S

PLACE: CHENNAI R. VENKATESH

DATE : 24.08.2012 Partner

(MNo. 28368)

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of EL Forge Limited as at March 31, 2010, the Profit and Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 (referred to as "the Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and the basis of the such verification of books and records of the company, as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable.

4. Further to our comments in the Annexure referred to above, we report that:

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

b. In our opinion, proper books of 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 and Profit and Loss Account dealt with by this report are in agreement with the books of account;

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

e. On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-Section (1) of Section 274 of the Companies Act, 1956; and

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

i) In the case of the Balance Sheet, of the state of the Companys affairs as at 31st March, 2010 and

ii) In the case of the Profit and Loss Account, of the Loss 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.

ANNEXURE TO AUDITORS REPORT (Referred tn paragraph 03 of our report of even date) To The Members of EL Forge Limited

01. Fixed Assets: -

(01) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(02) As explained to us, all the fixed assets have been physically verified by the management at once in a year, which in our opinion is reasonable, having regard to the size of the company and the nature of the fixed assets; material discrepancies were not noticed on such physical verification;

(03) In our opinion, substantial part of fixed assets have not been disposed off during the year, and the going concern status of the company is not affected;

02. Inventories: -

(01) As explained to us, the management of the company has conducted physical verification of inventories at reasonable intervals.

(02) In our opinion and based on the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its ousfness;

(03) The company has maintained proper records of inventories; and as explained to us, material discrepancies were not noticed on such physical verification;

03. Loan, either granted or taken, secured or unsecured to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956:- (01) Loans Granted

(a) The company has not granted any loan, secured/ unsecured to parties covered in the register maintained under Section 301 of the Companies Act 1956.

(b) Accordingly, the remaining part of the clause of the Order, namely (01) whether the rate of interest and other terms and conditions of the loan are, prima facie, prejudicial to the interest of the company; (02) whether receipt of principal and interest are regular; and (03) whether reasonable steps have been taken by the company, if the overdue amount is more than Rupees one Lakh, is not applicable to the company, for the year under report;

(02)Loans taken

(a) The company has taken unsecured loans (Fixed Deposit Accepted) from companies/ firms/ other parties covered in the register maintained under Section 301 of the Companies Act 1956. The details of number of the parties and amount involved, in respect of the aforesaid loan as at. end of the financial year under report, are 6 and Rs. 3331000/= respectively.

(b) In our opinion, the rate of interest and other terms and conditions of the loan are, prima facie, not prejudicial to the interest of the company; and

(c) In our opinion, payment of principal and interest are regular.

04. Internal Control: -

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and service. Further, on the basis of examination of the books and records, in accordance with auditing standards the generally accepted in India, and according to the information and explanation given to us, we have neither come across nor we have been informed of any instance of major weaknesses in internal control system; hence the question of continuing failure to correct major weakness does not arise.

05. Specified Parties Transactions: -

As per the examination of the books of account and other records, in accordance with the generally accepted auditing standards, in India, and on the basis of the information and explanations givens to us, contracts or arrangements referred to Section 301 of the Companies Act, 1956, have not been entered into by the company, during the year under report; except the Fixed deposits which have already been dealt with paragraph 03 above. accordingly, the remaining part of the clause of the Order, namely, whether such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, is not applicable to the company for the year under report.

0C. Public Deposits: -

In our opinion and according to the information and explanation given to us the company has compiled the directives issued by the Reserve Bank of India, the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under, with regard to the acceptance of deposits from the public. As explained to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve bank of India or any other Court or any other Tribunal on Company in respect of the aforesaid deposits.

07. Internal Audit System: -

In our opinion, the Internal Audit carried out by a firm of chartered accountants, is commensurate with its size and nature of its business of the company.

08. Cost Records: -

As explained to us, the Central Government has not prescribed any records under Section 209(1 )(d) of the Companies Act, 1956 for the products of the company; accordingly the remaining part of the clause of the Order, namely, "whether the records prescribed under aforesaid section are made and maintained" is not applicable to the company for the year under report.

09. Statutory Dues: -

(01) As per the records examined by us, the company is not regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax etc. with the appropriate authorities. As per the records examined by us, an amount of Rs. 35.32 Lakhs has been outstanding towards statutory dues, as at the last

day of the financial year under report, for a period of more than six months from the date they became payable. (02) As at the end of the financial year under report, disputed amount of income tax/ sales

tax/ wealth tax/ service Tax/ custom duty/ excise duty/ cess, is given below:

SI. No Nature of the Nature of Amount Period to Forum where dispute Statute the dues (Rs. in which the is pending

Lacs) Amount relates

1 ESI ESI 2.86 Year -2001 Employees Insurance Contribution court, Chennai

2 Income Tax Income Tax 66.02 Assement CIT Appeals Demand Year 2004-05 Chennai

3 The Service Service 48.67 2002-03 Commissioner Appeals Tax Act 1944 Excise to of Central Excise &

Demand 2008-09 Service Tax, Chennai

4 The Central Excise 4.03 2001-02 Assistant

Excise Act Demand to Commissioner of

1944 2006-07 Central Excise

Chromepet Division Chennai IV Commissibmnerate

5 The Central Excise 2.23 2005-06 Commissioner Appeals

Excise Act Demand to of Central Excise & 1944 2008-09 Service Tax, Chennai

6 The Central Excise 7.66 2001-02 Customs, Excise and

Excise Act Demand to Service Tax Apellate 1944 2006 -07 Tribunal

7 The Service Service Tax 1.11 2005-06 Assistance Tax Act 1944 Demand to Commissioner of

2008-09 Service Tax Hosur Divn

8 The Central Excise/ 6.22 2005-06 Assistance

Excise Act Interest to Commissioner of 1944 Demand 2008-09 Central Excise Chennai III

9 The Central Excise 1.55 2007 Assistance

Excise Act Demand to Commissioner of 1944 2009 Central Excise Chennai

10 The Central Excise 0.07 2009 Assistance

Excise Act Demand to Commissioner of 1944 2010 Central Excise Hosur

11 The Central Excise 1.30 2009 Assistance Commissioner

Excise Act Demand to of Central Excise 1944 2010 Tambaram II



10. Net worth: -

The company has accumulated loss amounting to Rs. 19.24 Crores at the end of the financial year under report. The company has incurred cash losses during the financial year under report and no cash losses has incurred immediately preceding the financial year.

11. Default in certain dues: -

Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions and banks, taking into account the fact that the company has gone for Corporate Debt Restructure with its Banks/Institutions.

12. Adequacy of Certain Loan Documents: -

The Clause, relating to adequacy of documents and records required to be maintained in cases where the company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the deficiencies, if any, in this regard, is not applicable to the company for the year under report, since company has not granted any loans and advances on the basis of such securities.

13. Special Statutes

In our opinion, the company has not engaged in the activities relating to chit fund or nidhi/ mutual benefit fund/ societies, accordingly the clause requiring the matters, namely, (01) the net-owned funds to deposit liability ratio is more than 1:20 as on the date of balance sheet, (02) Compliance with the prudential norms on income recognition and provisioning against sub-standard/ default/ loss assets, (03) adequacy of procedures for appraisal of credit proposals/ requests, assessment of credit needs and repayment capacity of the borrowers, and (04) the repayment schedule of various loans granted by the nidhi is based on the repayment capacity of the borrower and would be conducive to recovery of the loan amount, is not applicable to company for the year under report.

14. Dealing in securities

As per the records of the company, the company was not dealing/ trading in shares, securities, debentures and other investments. Accordingly, reporting the maintenance of proper records of the transactions and contracts and timely entries therein and holding of the shares, securities, debentures and other securities, in its own name except to the extent of the exemption, if any, granted under section 49 of the Companies Act, 1956, does not arise.

15. Guarantee Given

The company has given a guarantee for loans taken by its subsidiary company from a foreign bank and also in respect of loan taken by a domestic company from its banker. In our opinion, the terms and conditions thereof are not prejudicial to the interest of the company.

16. Term Loan Applications

As explained to us, the company has note obtained new term loans (excluding funded interest term loans on account of corporate debts restructure) during the year under report; and it has been further explained that the term loans (taken in earlier years) were applied for the purpose for which the loans were obtained.

17. Application of short and long term funds

According to the information and explanation given to us, and an overall examination of the Balance Sheet of the company as at the end of the financial year under report, in our opinion, the company has not applied short-term fund towards long-term application.

18. Preferential Allotment

The Company has not made any preferential allotment of shares during the year under report.

19. Securities in respect of debentures issued

The company has not issued any debentures during the financial year under report and accordingly, the question, "Whether securities have been created in respect of debentures issued" does not rise.

20. Public Issue

The company has not raised any money by way of public issue during the year. Hence, the question, "Whether the management has disclosed on the end use of money raised by public issues and the same has been verified does not arise.

21. Fraud

Based on the examination of the books of account and on the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under report; and remaining part of the clause relating to "the nature and the amount involved is to be indicated" is not applicable to the company for the year under report.

FOR P. RAJAGOPALAN & CO

Chartered Accountants

Regn No. of the Firm: 003408S

PLACE: CHENNAI R.VENKATESH

DATE : 26-05-2010 (MNo. 28368)

Partner