Auditor Report of First Leasing Company of India Ltd.

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of First Leasing Company of India Limited ("the Company"), which comprises the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and Cash Flow Statement and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

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

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2013;

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

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

Report on Other Legal and Regulatory Requirements

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

2. As required by section 227(3) of the 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) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on 31st March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

Annexure to the Auditors Report

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

(b) The fixed assets other than assets on lease have been physically verified by the management at reasonable intervals during the year. We have been informed that no material discrepancy was noticed on such physical verification.

(c) During the year, the Company has not disposed off substantial part of fixed assets, which would affect its status as going concern.

(ii) The Company does not have any inventory, except the stock on hire, the legal ownership of which is to be transferred to the hirers on receipt of the last instalment from them. The above said stocks on hire have been physically verified by the management during the year. In our opinion, the frequency of verification of the same is reasonable.

(iii) (a) As the Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the registers maintained under section 301 of the Act, the question of reporting on rate of interest, other terms and conditions, regularity in repayment of the principal, interest and details of overdue amounts of loans granted does not arise.

(b) The Company has not taken any loan, secured or unsecured, from any Director or their relative, listed in the register maintained under section 301 of the Act.

(iv) In our opinion and according to information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of Fixed assets and sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control system.

(v) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements, the particulars of which need to be entered in the register maintained under section 301 of the Act.

(vi) During the year the Company accepted deposits from public. However the company returned all the deposits. As a result, at end of the year, there are no outstanding deposits. During the period when the Company held deposits from public, in our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and the directions issued by the Reserve Bank of India.

(vii) In our opinion, the company has an internal audit system, managed by a firm of Chartered Accountants appointed by the Management, which is commensurate with its size and nature of business.

(viii) The Central Government has prescribed maintenance of Cost records under Section 209 (1) (d) of the Act and also Cost Audit, in respect of business relating to Electricity generated from wind power by the Company. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion, that prima-facie, the prescribed accounts and records have been generally made and maintained. We have not however, made a detailed examination of the same.

(ix) (a) According to the records of the company and information and explanations given to us, the Company has been regular in depositing with appropriate authorities undisputed Statutory dues including Provident Fund, Employees State Insurance Act, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other Statutory dues wherever applicable. We are informed that the provisions of Central Excise Act is not applicable to the Company.

(b) According to the records of the Company and information and explanations given to us, there is disputed Sales Tax demand from different States for a sum aggregating to Rs. 1,744.36 Lakhs against which the appeals are pending. (Before AACs and Commissioners - Rs. 1,371.79 Lakhs: Tribunals - Rs. 287.06 Lakhs: Revisional Board - Rs. 20.79 Lakhs and High Courts - Rs. 64.72 Lakhs).

According to the records of the Company and information and explanations given to us, there are disputed Income Tax demands for a sum of Rs. 1,063.80 Lakhs, in respect of which appeals are pending before the Hon''ble High Court of Madras (Rs. 662.40 Lakhs), Income tax Appellate Tribunal (Rs. 348.66 Lakhs) and before the Chief Commissioner of Income Tax, Chennai (Rs. 23.36 Lakhs) and before the Assessing Officer (Rs. 29.38 Lakhs).

(x) The Company does not have any accumulated losses, as at the end of the year. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

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

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of Clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable.

(xiv) In our opinion and according to the information and explanations given to us, the Company does not deal / trade in shares, securities, debentures and other investments.

(xv) According to the information given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to information and explanation given to us and the records examined by us, securities / Charges have been created in respect of the debentures issued. However there are no outstanding on the reporting date.

(xx) During the period covered by our audit the company had not raised any money by public issue.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under report.



For SARATHY & BALU

Chartered Accountants

FRN - 03621S

CA. N. R. SRIDHARAN

Place : Ooty Partner

Date : 27th May 2013 M.No. 015527

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of First Leasing Company of India Limited, ('the Company') as at 31st March 2012, the Statement of Profit and Loss 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, issued by the Central Government, in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent they are applicable to the Company.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) 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;

ii) 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;

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

iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act.

v) On the basis of written representations received from the Directors, as on 31st March 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi) The question of provision / payment of cess under section 441 A of the Companies Act 1956, does not arise as the said section is yet to be notified;

vii) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon attached thereto, 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

b) in the case of the Statement of Profit and Loss, of the Profit, of the Company, for the year ended on that date; and

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

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

(b) The fixed assets other than assets on lease have been physically verified by the management at reasonable intervals during the year. We have been informed that no material discrepancy was noticed on such physical verification.

(c) During the year, the Company has not disposed off substantial part of fixed assets, which would affect its status as going concern.

(ii) The Company does not have any inventory, except the stock on hire, the legal ownership of which is to be transferred to the hirers on receipt of the last instalment from them. The above said stocks on hire have been physically verified by the management during the year. In our opinion, the frequency of verification of the same is reasonable.

(iii) (a) As the Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the registers maintained under section 301 of the Act, the question of reporting on rate of interest, other terms and conditions, regularity in repayment of the principal, interest and details of overdue amounts of loans granted does not arise.

(b) The Company has not taken any loan, secured or unsecured, from any Director or their relative, listed in the register maintained under section 301 of the Act.

(iv) In our opinion and according to information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of Fixed assets and sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control system.

(v) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements, the particulars of which need to be entered in the register maintained under section 301 of the Act.

(vi) The Company has accepted deposits from public. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and the directions issued by the Reserve Bank of India.

(vii) In our opinion, the company has an internal audit system, managed by a firm of Chartered Accountants appointed by the Management, which is commensurate with its size and nature of business.

(viii) The Central Government has prescribed maintenance of Cost records under Section 209 (1) (d) of the Act, in respect of business relating to Electricity generated from wind power by the Company. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion, that prima- facie, the prescribed accounts and records have been generally made and maintained. We have not however, made a detailed examiners of the same.

(ix) (a) According to the records of the company and information and explanations given to us, the Company has been regular in depositing with appropriate authorities undisputed Statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other Statutory dues wherever applicable. We are informed that the provisions of Employees State Insurance Act and Central Excise Act are not applicable to the Company.

(b) According to the records of the Company and information and explanations given to us, there is disputed Sales Tax demand from different States for a sum aggregating to Rs. 1,644.72 Lakhs against which the appeals are pending. (Before AACs and Commissioners - Rs. 1,272.15 Lakhs: Tribunals - Rs. 287.06 Lakhs: Revisional Board - Rs. 20.79 Lakhs and High Courts - Rs. 64.72 Lakhs).

According to the records of the Company and information and explanations given to us, there are disputed Income Tax demands for a sum of Rs. 1,841.29 Lakhs, in respect of which appeals are pending before the Hon'ble High Court of Madras (Rs. 1,301.86 Lakhs), Income tax Appellate Tribunal (Rs. 348.65 Lakhs) and before the Chief Commissioner of Income Tax, Chennai (Rs. 190.78 Lakhs). The Company has paid a sum of Rs. 921.94 Lakhs, under protest.

According to the records of the Company and information and explanations given to us, there is disputed Fringe Benefit Tax for a sum of Rs. 22.58 Lakhs, which has not been deposited, against which a writ petition is pending before the Hon'ble Supreme Court of India.

(x) The Company does not have any accumulated losses, as at the end of the year. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

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

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of Clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable.

(xiv) In our opinion and according to the information and explanations given to us, the Company does not deal / trade in shares, securities, debentures and other investments.

(xv) According to the information given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to information and explanation given to us and the records examined by us, securities / Charges have been created in respect of the debentures issued. However there are no outstanding on the reporting date.

(xx) During the period covered by our audit the company had not raised any money by public issue.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under report.

For SARATHY & BALU

Chartered Accountants

FRN - 03621S

CA. N. R. SRIDHARAN

Place : Chennai Partner

Date : 28th May 2012 M.No. 015527

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of First Leasing Company of India Limited, ('the Company') as at 31st March 2011, the Profit and Loss Account 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 disclosure 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, issued by the Central Government, in terms of sub-section (4A) of section 227 of the Companies Act, 1956 and on such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent they are applicable to the Company.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) 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;

ii) 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;

iii) The Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act.

v) On the basis of written representations received from the Directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vi) The question of provision / payment of cess under section 441 A of the Companies Act 1956, does not arise as the said section is yet to be notified;

vii) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon attached thereto, 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

b) in the case of the Profit and Loss Account, of the Profit, of the Company, for the year ended on that date; and

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

Annexure to the Auditors' Report

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

(b) The fixed assets other than assets on lease have been physically verified by the Management at reasonable intervals during the year. We have been informed that no material discrepancy was noticed on such physical verification.

(c) During the year, the Company has not disposed off substantial part of fixed assets, which would affect its status as going concern.

(ii) The Company does not have any inventory, except the stock on hire, the legal ownership of which is to be transferred to the hirers on receipt of the last instalment from them. The above said stocks on hire have been physically verified by the Management during the year. In our opinion, the frequency of verification of the same is reasonable.

(iii) (a) As the Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the registers maintained under section 301 of the Act, the question of reporting on rate of interest, other terms and conditions, regularity in repayment of the principal, interest and details of overdue amounts of loans granted does not arise.

(b) The Company has not taken any secured loan from any Director or their relative, listed in the register maintained under section 301 of the Act. However the Company has taken Deposit aggregating to Rs. 977.85 Lacs from two Directors. In our opinion the rate of interest and other terms and conditions of the above deposit are not prima-facie prejudicial to the interest of the Company.

(iv) In our opinion and according to information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of Fixed assets and sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control system.

(v) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements, the particulars of which need to be entered in the register maintained under section 301 of the Act.

(vi) The Company has accepted deposits from public. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and the directions issued by the Reserve Bank of India.

(vii) In our opinion, the company has an internal audit system, managed by a firm of Chartered Accountants appointed by the Management, which is commensurate with its size and nature of business.

(viii) The Central Government has prescribed maintenance of Cost records under Section 209 (1) (d) of the Act, in respect of business relating to Electricity generated from wind power by the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima- facie, the prescribed accounts and records have been generally made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) According to the records of the company and information and explanations given to us, the Company has been regular in depositing with appropriate authorities undisputed Statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other Statutory dues wherever applicable. We are informed that the provisions of Employees State Insurance Act and Central Excise Act are not applicable to the Company. (b) According to the records of the Company and information and explanations given to us, there is disputed Sales Tax demand from different States for a sum aggregating to Rs. 1224.41 Lacs against which the appeals are pending (Before AACs and Commissioners - Rs. 893.80 Lacs: Tribunals - Rs. 235.74 Lacs: Revisional Board - Rs. 20.79 Lacs and High Courts - Rs. 74.08 Lacs). According to the records of the Company and information and explanations given to us, there are disputed Income Tax demands for a sum of Rs. 1879.12 Lacs, in respect of which appeals are pending before Income tax Appellate Tribunal (Rs. 391.20 Lacs) and the High Court of Madras (Rs. 1487.92 Lacs). The Company has paid a sum of Rs. 955.51 Lacs, under protest.

According to the records of the Company and information and explanations given to us, there is disputed Fringe Benefit Tax for a sum of Rs. 22.58 Lacs, which has not been deposited, against which a writ petition is pending before High Court of Madras and a stay has been granted.

(x) The Company does not have any accumulated losses, as at the end of the year. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

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

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of Clause 4

(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable.

(xiv) In our opinion and according to the information and explanations given to us, the Company does not deal/trade in shares, securities, debentures and other investments.

(xv) According to the information given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which the loans were obtained.

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

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to information and explanations given to us and the records examined by us, securities / charges have been created in respect of the debentures issued.

(xx) During the period covered by our audit the company had not raised any money by public issue.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under report.

For SARATHY & BALU

Chartered Accountants

FRN - 03621S CA. V. BALASUBRAMANYAN Place : Chennai Partner

Date : 5th May, 2011 M.No. 18444

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of First Leasing Company of India Limited, (the Company) as at 31st March 2010, the Profit and Loss Account 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, issued by the Central Government, in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent they are applicable to the Company.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i) 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;

ii) 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;

iii) The Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act.

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

vi) The question of provision / payment of cess under section 441 A of the Companies Act 1956, does not arise as the said section is yet to be notified;

vii) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon attached thereto, 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

b) in the case of the Profit and Loss Account, of the Profit, of the Company, for the year ended on that date; and

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

Annexure to the Auditors Report

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

(b) The fixed assets other than assets on lease have been physically verified by the management at reasonable intervals during the year. We have been informed that no material discrepancy was noticed on such physical verification.

(c) During the year, the Company has not disposed off substantial part of fixed assets, which would affect its status as going concern.

(ii) The Company does not have any inventory, except the stock on hire, the legal ownership of which is to be transferred to the hirers on receipt of the last instalment from them. The above said stocks on hire have been physically verified by the management during the year. In our opinion, the frequency of verification of the same is reasonable.

(iii) (a) As the Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the registers maintained under section 301 of the Act, the question of reporting on rate of interest, other terms and conditions, regularity in repayment of the principal, interest and details of overdue amounts of loans granted does not arise.

(b) The Company has taken secured loans, by way of Debentures from a Director and his relative listed in the register maintained under section 301 of the Act, aggregating to Rs.118.00 Lacs. The Company has also taken Deposit of Rs. 91.00 Lacs from a Director.

In our opinion the rate of interest and other terms and conditions of the above loan are not prima-facie prejudicial to the interest of the Company.

(iv) In our opinion and according to information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of Fixed assets and sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control system.

(v) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements, the particulars of which need to be entered in the register maintained under section 301 of the Act. .

(vi) The Company has accepted deposits from public. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and the directions issued by the Reserve Bank of India.

(vii) In our opinion, the company has an internal audit system, managed by a firm of Chartered Accountants appointed by the Management, which is commensurate with its size and nature of business.

(viii) The Central Government has prescribed maintenance of Cost records under Section 209 (1) (d) of the Act, in respect of business relating to Electricity generated from wind power by the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima- facie, the prescribed accounts and records have been generally made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) According to the records of the company and information and explanations given to us, the Company has been regular in depositing with appropriate authorities undisputed Statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other Statutory dues wherever applicable. We are informed that the provisions of Employees State Insurance Act and Central Excise Act are not applicable to the Company. (b) According to the records of the Company and information and explanations given to us, there is disputed Sales Tax demand from different States for a sum aggregating to Rs. 888.77 Lacs against which the appeals are pending. (Before AACs and Commissioners - Rs. 270.13 Lacs: Tribunals - Rs. 194.29 Lacs: Revisional Board - Rs. 20.79 Lacs: High Courts - Rs. 110.12 Lacs and the Supreme Court - Rs. 293.44 Lacs). According to the records of the Company and information and explanations given to us, there are disputed Income Tax demands for a sum of Rs.3,467.77 lacs, which have not been deposited, against which the appeals are pending before High Court of Madras and stay were granted. According to the records of the Company and information and explanations given to us, there is disputed Fringe Benefit Tax for a sum of Rs. 22.58 Lacs, which has not been deposited, against which a writ petition is pending before High Court of Madras and a stay has been granted.

(x) The Company does not have any accumulated losses, as at the end of the year. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

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

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of Clause 4

(xiii) of the Companies(Auditors Report) Order, 2003 are not applicable.

(xiv) In our opinion and according to the information and explanations given to us, the Company does not deal / trade in shares, securities, debentures and other investments.

(xv) According to the information given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, We report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to information and explanation given to us and the records examined by us, securities / Charges have been created in respect of the debentures issued, except for debentures aggregating to Rs.10,500 lacs.

(xx) During the period covered by our audit the company had not raised any money by public issue.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under report.

Year Gross Net Cash

Revenue Profit Profit

1974 8.46 2.35 4.23

1975 19.84 6.77 10.30

1976 27.11 8.90 14.20

1977 36.03 9.37 18.67

1978 47.69 16.48 28.01

1979 62.72 22.58 40.34

1980 95.34 37.43 68.47

1981 133.34 48.04 89.78

1982 202.76 71.46 130.54

1983 279.82 90.04 163.77

1984 388.42 114.67 234.34

1985 597.02 139.31 324.06

1986 920.08 238.01 503.99

1987 1,352.19 238.24 690.18

1988 1,800.50 301.10* 1,020.93

1989 2,573.36 353.83 1,449.51

1990 3,301.57 457.98 1,908.01

1991 3,698.47 501.77 2,005.35

1992 4,564.10 610.68 2,168.29

1993 5,783.61 763.24 2,799.53

1994 7,617.85 1,028.18 3,951.75

1995 9,826.94 1,398.84 5,094.17

1996 11,207.61 1,400.40 5,963.36

1997 11,772.85 1,404.38 6,378.77

1998 12,989.57 1,475.34 6,951.65

1999 14,131.12 1,858.37 & 7,675.64

2000 15,590.27 1,656.90 7,592.79

2002* 18,923.86 1,787.90 7,842.68

2003 13,618.01 1,910.95 5,462.44

2004 11,848.97 2,157.50 4,843.12

2005 10,952.46 2,410.26 4,112.29

2006 11,649.72 2,710.84 4,338.55

2007 13,041.59 2,536.06 5,378.69

2008 15,868.27 3,095.80 6,726.97

2009 19,101.66 3,354.91 7,128.73

2010 19,082.12 3,487.05 7,765.37

Year Total Reserves

Asset and

Footings Surplus

1974 64.05 2.35

1975 89.21 4.26

1976 119.10 8.68

1977 164.17 13.49

1978 181.44 24.26

1979 238.18 35.25

1980 305.66 63.64

1981 464.51 101.70

1982 745.91 161.44

1983 1,102.50 211.44

1984 1,797.22 298.40

1985 2,587.71 396.58

1986 4,874.99 732.29

1987 6,128.16 822.41

1988 7,860.94 848.90

1989 11,040.92 929.85

1990 13,189.72 903.19

1991 15,122.71 1,165.13

1992 20.334.49 1,646.26

1993 24.734.50 1,964.87

1994 30,988.14 2,462.82

1995 33,728.78 3,407.33

1996 34,996.35 5,045.14

1997 39.431.43 5,250.96

1998 45,957.63 6,148.64

1999 53,816.62 7,419.72

2000 64,655.82 8,493.50

2002 71,013.55 9,716.65

2003 54,636.94 11,174.70

2004 61,780.66 13,028.91

2005 72,562.92 14,863.60

2006 79.982.44 16,989.73

2007 91,651.12 13,526.31

2008 1,08,913.94 16,025.83 2009 1,26,192.26 18,877.37

2010 1,39,030.77 21,881.98

(Rs. in Lacs)

Year Dividends Intrinsic

(%) value of each share (Rs.)

1974 - 10.94

1975 18 11.70

1976 18 13.47

1977 18 15.40

1978 18 17.25

1979 19 18.83

1980 19 22.70

1981 20 30.34

1982 20 40.95

1983 20 31.78 *

1984 21 33.47

1985 21 40.64

1986 30 29.19

1987 25* 31.63

1988 26 23.47

1989 26 24.76

1990 28 26.47

1991 28 27.56

1992 30 27.94

1993 32 33.49

1994 35 39.07

1995 35 33.53

1996 32 34.63 **

1997 32 33.80 ***

1998 25 37.75

1999 25 44.26 ****

2000 25 50.10

2002 26.67 55.86

2003 20 62.73

2004 20 67.16

2005 22.50 75.22

2006 22.50 84.55

2007 22.50 69.35

2008 22.50 80.32

2009 18.00 92.83

2010 18.00ß 106.01

After a Bonus Issue of 1 : 3 and a Public Issue of 5,47,464 Equity Shares. § After a Rights Issue of 24,80,699 Equity Shares.

- Dividend of 30% in 1986 was in lieu of a Bonus Issue and represented a one time payment. Accordingly, dividend of 25% in 1987 represented a natural progression over the dividend declared in earlier years.

* Includes write back of Investment Allowance Reserves [utilised] plus Development Rebate.

@ On an enhanced capital issue of Rs. 6.29 crores versus Rs. 3.79 crores for the previous year.

** After conversion of warrant and CCP of 60,00,000 Equity Shares.

*** After rights issue and private placement of 64,27,598 Equity Shares.

ß As recommended by the Board of Directors.

**** After private placement of 20,00,000 Equity Shares.

& Including an Extra-Ordinary income of Rs. 3.5 crores in respect of

disinvestment of shareholding in FIAM Ltd.

* For a period of sixteen months (from 01.12.2000 to 31.03.2002)

For SARATHY & BALU

Chartered Accountants

FRN - 03621S

CA. V. BALASUBRAMANYAN

Place:Chennai Partner

Date :4th May 2010 M.No. 18444