Auditor Report of Kinetic Engineering Ltd.

Mar 31, 2025

We have audited the standalone financial statements
of Kinetic Engineering Limited ("the Company”), which
comprise the Balance Sheet as at March 31, 2025, and the
Statement of Profit and Loss (including other comprehensive
income), Statement of Changes in Equity and Statement
of Cash Flows for the year then ended, and notes to the
standalone financial statements, including summary of
significant accounting policies and other explanatory
information (hereinafter referred to as "the standalone
financial statements”).

In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements give the information
required by the Companies Act, 2013 ("the Act”) in the manner
so required and give a true and fair view in conformity
with the accounting principles generally accepted in India
including Indian Accounting Standards (''Ind AS'') specified
under section 133 of the Act, of the state of affairs (financial
position) of the Company as at March 31, 2025, and its
loss (financial performance including other comprehensive
income), its changes in equity and cash flows for the year
ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under Section 143(10) of the Act.
Our responsibilities under those SAs are further described in
the Auditor''s Responsibilities for the Audit of the Standalone
Financial Statements section of our report. We are
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 our audit of the standalone financial statements
under the provisions of the Act and the Rules there under,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters (''KAM'') are those matters that, in our
professional judgment, were of most significance in our
audit of the standalone financial statements of the current
period. These matters were addressed in the context of our
audit of the standalone financial statements as a whole, and

in forming our opinion thereon, and we do not provide a
separate opinion on these matters.

Other Information

The Company''s management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Company''s
annual report, but does not include the standalone financial
statements and our auditors'' report thereon.

Our opinion on the standalone financial statements does
not cover the other information and we do not express
any form of assurance/conclusion thereon. In connection
with our audit of the standalone financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the standalone financial statements or
our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.

Management''s Responsibility for the Standalone
Financial Statements

The Company''s management and Board of Directors are
responsible for the matters stated in Section 134(5) of the Act
with respect to the preparation of these standalone financial
statements that give a true and fair view of the state of affairs
(financial position), profit or loss (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 Indian Accounting Standards (Ind AS) specified under
Section 133 of the Act. This responsibility also includes
maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets
of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the standalone financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

In preparing the standalone financial statements,
management and Board of Directors are 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. The Board of Directors is also responsible for
overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the
Standalone Financial Statements

Our objectives are to obtain reasonable assurance about
whether the standalone 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 our
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 standalone
financial statements. As part of an audit in accordance
with SAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:

¦ Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.

¦ Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the company has adequate internal
financial controls with reference to standalone financial
statements in place and the operating effectiveness of
such controls.

¦ Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.

¦ Conclude on the appropriateness of management''s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions
that may cast significant doubt on the company''s
ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to
draw attention in our auditor''s report to the related
disclosures in the standalone financial statements or, if
such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence
obtained up to the date of our auditors'' report. However,

future events or conditions may cause the company to
cease to continue as a going concern.

¦ Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.

We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we
identify during our audit.

We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors''
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.

Report on Other Legal and Regulatory
Requirements

1. As required by the Companies (Auditors'' Report) Order,
2020 ("the Order”) issued by the Central Government of
India in terms of Section 143(11) of the Act, we give in
"Annexure A” a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c) The Balance Sheet, the Statement of Profit and
Loss (including other comprehensive income), the
Statement of Changes in Equity and the Statement
of Cash Flows dealt with by this Report are in
agreement with the books of account;

d) In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified under
Section 133 of the Act;

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 with reference to financial statements
of the Company and the operating effectiveness
of such controls, refer to our separate Report in
"Annexure B”;

g) With respect to the other matters to be included
in the Auditor''s Report in accordance with the
requirements of section 197(16) of the Act, as
amended, in our opinion and to the best of our
information and according to the explanations
given to us, the remuneration paid by the Company
to its directors during the year is in accordance with
the provisions of section 197 of the Act.

h) 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:

i. The Company has disclosed the impact of
pending litigations as at March 31, 2025 on its
financial position in its standalone financial
statements (Refer Note 38);

ii. The Company did not have any long-term
contracts, including derivative contracts for
which there were any material foreseeable
losses as at 31 March 2025;

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

iv. (a) The management has represented to us

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
(Refer Note No. 45);

(b) The management has represented to us,
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 (Refer
Note No. 45);

(c) Based on the information and explanation
given to us and audit procedures performed
as considered reasonable and appropriate
in the circumstances, nothing has come to
our notice that has caused us to believe
that the representations made by the
management and as mentioned under sub¬
clause (iv) (a) and (iv) (b) above contain any
material misstatement.

v. During the year, the company has not declared
or paid any dividend.

vi. Based on our examination, which included
test checks, the Company has used accounting
software systems for maintaining its books of
account for the financial year ended March
31, 2025 which have the feature of recording
audit trail (edit log) facility and the same has
operated throughout the year for all relevant
transactions recorded in the software systems.
Further, during the course of our audit we did
not come across any instance of the audit trail
feature being tampered with and the audit trail
has been preserved by the Company as per the
statutory requirements for record retention.

For Pawan Jain and Associates

Chartered Accountants
Firm Registration No: 0107867W

Place: Pune CA Pawan Jain

Date: 13^th May 2025 Partner

UDIN: 25032900BMILTH8598 Membership No: 032900

---

Mar 31, 2024

KINETIC ENGINEERING LIMITED

REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS Opinion

We have audited the standalone financial statements of Kinetic Engineering Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2024, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2024, and its loss (financial performance including other comprehensive income), its changes in equity and cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are 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 our audit of the standalone financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Other Information

The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditors'' report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance/conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone Financial Statements

The Company''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (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 Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are 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. The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone 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 our 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 standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B";

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:

i. The Company has disclosed the impact of pending litigations as at March 31, 2024 on its financial position in its standalone financial statements (Refer Note 38);

ii. The Company did not have any long-term contracts, including derivative contracts for which there were any material foreseeable losses as at 31 March 2024;

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

iv. (a) The management has represented to us 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 (Refer Note No. 47);

(b) The management has represented to us, 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 (Refer Note No. 47);

(c) Based on the information and explanation given to us and audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations made by the management and as mentioned under sub-clause (iv) (a) and (iv) (b) above contain any material misstatement.

For Pawan Jain and Associates

Chartered Accountants

Firm Registration No: 0107867W

CA Pawan Jain Partner

Membership No: 032900

Place: Pune

Date: 30^th May 2024

UDIN:24032900BKFCBF1823

---

Mar 31, 2023

KINETIC ENGINEERING LIMITED

REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the standalone financial statements of Kinetic Engineering Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2023, and its loss (financial performance including other comprehensive income), its changes in equity and cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are 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 our audit of the standalone financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone Financial Statements:

Refer Note - 44 describing the basis of company''s ability to continue as a Going Concern.

Our opinion is not modified in respect of the above mentioned matter.

Key Audit Matters

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

Other Information

The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditors'' report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance/conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone Financial Statements

The Company''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (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 Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are 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. The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone 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 our 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 standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B";

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:

i. The Company has disclosed the impact of pending litigations as at March 31, 2023 on its financial position in its standalone financial statements (Refer Note 38);

ii. The Company did not have any long-term contracts, including derivative contracts for which there were any material foreseeable losses as at 31 March 2023;

iii. There has been no amount required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. (a) The management has represented to us 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 (Refer Note No. 47);

i. The management has represented to us, 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 (Refer Note No. 47);

ii. Based on the information and explanation given to us and audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations made by the management and as mentioned under sub-clause (iv) (a) and (iv) (b) above contain any material misstatement.

For Pawan Jain and Associates

Chartered Accountants

Firm''s Registration No.: 0107867W

CA Pawan Jain

Pune Partner

May 30, 2023 Membership No.: 032900

UDIN: - 23032900BGXOMH2564

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Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of Kinetic Engineering Limited (the “Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year ended on 31st March, 2018 and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the “Act”) with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including other Comprehensive Income, Cash Flows and changes in Equity of the company in accordance with the Indian Accounting Standards (“Ind AS”) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS Financial Statements based on our Audit.

In conducting our audit, we have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the Audit Report under the provisions of the Act and the Rules made thereunder and the Order issued under Section 143(11) of the Act.

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

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

We believe that the Audit evidence obtained by us is sufficient and appropriate to provide a basis for our Audit opinion on the Standalone Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS 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 Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its Loss, total Comprehensive Income, its Cash Flows and the changes in Equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone Ind AS Financial Statements:

a. The financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Standalone Ind AS Financial Statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by predecessor, on which they expressed an unmodified opinion dated May 29, 2017 and May 28, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

b. Refer Note No. 31, relating to Managerial remuneration, which is subject to approval of Central Govt.

c. Refer Note No. 45 describing the basis of company''s ability to continue as a Going Concern.

Our opinion is not modified in respect of the above mentioned matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, based on our Audit, we report to the extent applicable that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this Report, are in agreement with the relevant books of accounts.

d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the Written Representations received from the Directors as on 31st March, 2018 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2018 from being appointed as a Director in terms of Section164(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 our separate Report in “Annexure B”.

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:

i. The Company has disclosed the impact of pending litigation on its financial position in its Standalone Ind AS Financial Statements - Refer Note No. 39.

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

iii. There has been no amount required to be transferred to the Investor Education and Protection Fund by the Company.

(Referred to in paragraph 1 under the heading, “Report on Other Legal and Regulatory Requirements” of our report on even date)

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

(b) As informed to us, the fixed assets are been physically verified by the management at regular intervals based on the programme of verification which in our opinion is reasonable. All the major fixed assets have been verified by the management in the current year and discrepancies noticed on such physical verification were not material and the same have been properly dealt with in the books of account.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

ii. Physical verification of inventory has been conducted by the management during the current year. In our opinion, the interval of such verification is reasonable. As informed to us, discrepancies noticed on physical verification were not material and the same have been properly dealt with in the books of account.

iii. The company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore, clause (iii) a, b and c of the Order are not applicable to the Company.

iv. According to the information and explanations provided to us, in respect of loans, investments, guarantees, and security; provisions of Sections 185 and 186 of the Companies Act, 2013 have been complied with wherever applicable.

v. According to information and explanation provided to us, the Company has not accepted deposits, hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, are not applicable to the Company. According to information and explanation provided to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

vi. As informed to us, the cost records, pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act 2013 are not applicable to the company.

vii. (a) According to the records of the company, it is generally regular in depositing undisputed statutory dues of, provident fund, employees'' state insurance, income-tax, goods and service tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities except depositing dues of Provident Fund where there are delays.

According to the information and explanation provided to us, undisputed amounts payable in respect of Provident Fund and ESIC amounting to Rs. 8.07 lakhs and in respect of Income Tax Deducted at Source amounting to Rs. 5.38 Lakhs were in arrears as at 31st March 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanation provided to us, following dues of Income Tax, Sales Tax, CST, Service Tax, Entry Tax, Excise Duty, Value Added Tax, have not been deposited on account of some dispute:

(Rs. In Lacs)

Nature of Dues	Amount	Forum where dispute is pending
Income Tax 2000-01	1.29	ITAT, Pune
Income Tax 2009-10	186.12	CIT Appeals Pune
Income Tax 2011-12	0.24	CIT Appeals Pune
West Bengal Sales tax, CST 2001-02, 02-03	6.92	Dy. Commissioner of Sales Tax, Kolkata
CST (Pune) 2005-06	65.35	Commissioner Sales Tax, Pune
CST 1994-95, 99-00, 00-01, 02-03, 03-04, 08-09, 07-08, 09-10	105.77	Appellate Dy. Commissioner Commercial Tax, Indore
CST 1998-99, 2001-02	27.27	Appellate Dy. Commissioner Commercial Tax, Indore
Sales Tax, Kolkata 2001-02	0.60	Sales Tax Tribunal, Kolkata
Entry Tax 1994-95, 95-96, 2007-08	8.41	Dy. Commissioner Commercial Tax, Indore
MP Commercial Tax 1998-99	1.88	Appellate Dy. Commissioner Commercial Tax, Indore
MP Commercial Tax 1999-00, 2007-08, 2008-09	14.12	Appellate Dy. Commissioner Commercial Tax, Indore
Supa VAT 2006-07,2007-08, 2008-09, 2009-10	361.12	Jt Commissioner Appeals, A. Nagar
Excise Duty	166.19	Appellate Tribunal
Excise Duty	171.19	CESTAT, Mumbai and Nagpur

viii. Based on our Audit procedures and according to the information and explanation provided to us, the Company has not defaulted in repayment of dues to a financial institution, bank or government. The Company does not have any debenture holders.

ix. According to information and explanation provided to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). The Company has not raised any term loans during the year.

x. Based upon the Audit procedures performed by us and according to the information and explanations provided to us by the management, no fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported to us during the year.

xi. According to the information and explanation provided to us, the managerial remuneration paid of Rs. 53.61 Lakhs is subject to approval of Central Government.

xii. The Company is not a Nidhi Company and accordingly, Clause (xii) of the Order is not applicable to the Company.

xiii. According to the information and explanation provided to us, all transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 wherever applicable and the details have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable Indian Accounting Standards.

xiv. During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.

xv. According to the information and explanation provided to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

xvi. According to the information and explanation provided to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

(Referred to in paragraph 2(f) under the heading, “Report on Other Legal and Regulatory Requirements” of our report on even date)

We have audited the internal financial controls over financial reporting of Kinetic Engineering Limited (the “Company”) as of March 31, 2018 in conjunction with our Audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting of the Company based on our audit. We conducted our Audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an Audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the Audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our Audit involves performing procedures to obtain Audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our Audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the Auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the Audit evidence we have obtained is sufficient and appropriate to provide a basis for our Audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the criteria for internal financial control over financial reporting established by Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For Pawan Jain And Associates

Chartered Accountants

Firm''s Registration No.: 0107867W

Pawan Jain

Partner

Membership No.: 032900

Pune

29th May, 2018

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Mar 31, 2016

TO THE MEMBERS OF KINETIC ENGINEERING LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Kinetic Engineering Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 and its Loss and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

Refer Note No. A-22, relating to Managerial Remuneration, which is subject to approval of Central Govt.

Refer Note No. 18 describing the basis of company''s ability to continue as a Going Concern.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 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 our Separate Report in “Annexure B”.

(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:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2 to the financial statements.

ii. The Company did not have any long term contracts including derivative contracts having material foreseeable losses for which provision was required.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure - A Re: KINETIC ENGINEERING LIMITED

Referred to in paragraph 1 under the heading, “Report on Other Legal and Regulatory Requirements” of our report on even date:

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

(b) As informed to us, the fixed assets are been physically verified by the management at regular intervals based on the programme of verification which in our opinion is reasonable. All the major fixed assets have been verified by the management in the current year and discrepancies noticed on such physical verification were not material and the same have been properly dealt with in the books of account.

(c) According to the information and explanation provided to us and based on audit procedures conducted by us, the title deeds of immovable properties are held in the name of the company except the title deed in respect of lease hold land at Supa which is in the name of merged entity and is in the process of being transferred in the name of the company.

(ii) Physical verification of inventory has been conducted by the management during the current year. In our opinion, the interval of such verification is reasonable. As informed to us, discrepancies noticed on physical verification were not material and the same have been properly dealt with in the books of account.

(iii) The company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, clause (iii) a, b and c of the Order are not applicable to the Company.

(iv)According to the information and explanations provided to us, in respect of loans, investments, guarantees, and security; provisions of section 185 and 186 of the Companies Act, 2013 have been complied with wherever applicable.

(v) According to information and explanation provided to us, the Company has not accepted deposits, hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, are not applicable to the Company. According to information and explanation provided to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) As informed to us, the cost records, pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (l) of section 148 of the Companies Act, 2013, are not applicable to the company.

(vii)(a) According to the records of the Company, it is generally regular in depositing undisputed statutory dues of employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities except deposing dues of provident Fund where there are delays. According to the information and explanation provided to us, undisputed amounts payable in respect of Income tax deducted at source of Rs. 5.37 Lacs and Provident Fund amounting to Rs. 7.01 Lacs were in arrears as at 31st March, 2016, for a period of more than six months from the date they became payable.

(b) According to the information and explanation provided to us, following are the details of disputed dues of income tax, sales tax, service tax, duty of customs, duty of excise, which have not been deposited on account of any dispute except those mentioned below:

Statement of disputed dues: (Rs. In Lacs)

Nature of dues	Amount	Forum where dispute is pending.
Income Tax 2000-01	1.29	ITAT, Pune
Income Tax 2007-08	1455.65	CIT Appeals Pune
Income Tax 2009-10	186.12	CIT Appeals Pune
Income Tax 2009-10	144.49	CIT Appeals Pune
Income Tax 2011-12	0.24	CIT Appeals Pune
Income Tax 2011-12	62.11	CIT Appeals Pune
West Bengal Sales tax,	6.92	Dy. Commissioner of Sales Tax, Kolkata
CST 2001-02, 02-03
CST (Pune) 2005-06	65.35	Commissioner Sales Tax, Pune
CST 1994-95, 99-00, 00-01, 02-03,	105.77	Appellate Dy. Commissioner commercial
03-04, 08-09, 07-08, 09-10		Tax, Indore
CST 1998-99, 2001-02	27.27	Appellate Dy. Commissioner commercial Tax, Indore
Sales Tax, Kolkatta 2001-02	0.60	Sales Tax Tribunal, Kolkatta
Entry Tax 1994-95, 95-96, 2007-08	8.41	Dy. Commissioner Commercial Tax, Indore
MP Commercial Tax 1998-99	1.88	Appellate Dy. Commissioner commercial Tax, Indore
MP Commercial Tax 1999-00,	14.12	Appellate Dy. Commissioner commercial
2007-08, 2008-09		Tax, Indore
Supa VAT 2008-09	303.43	Jt Commissioner Appeals, A. Nagar
Excise Duty	166.19	Appellate Tribunal
Excise Duty	121.12	CESTAT, Mumbai

(viii) Based on our audit procedures and according to the information and explanation provided to us, the Company has not defaulted in repayment of dues to a financial institution, bank or government. The Company does not have any debenture holders.

(ix) According to information and explanation provided to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). The Company has not raised any term loans during the year.

(x) Based upon the audit procedures performed by us and according to the information and explanations provided to us by the management, no fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported to us during the year.

(xi) According to the information and explanation provided to us, the managerial remuneration paid to Vice Chairperson and Managing director of Rs, 78.72 is subject to approval of Central Government.

(xii) The Company is not a Nidhi Company and accordingly, Clause (xii) of the Order is not applicable to the Company.

(xii) According to the information and explanation provided to us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 wherever applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanation provided to us, the Company has made preferential allotment for which the requirements of section 42 of the Companies Act 2013 have been complied and the amount raised has been used for the purpose for which it was raised.

(xv) According to the information and explanation provided to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

(xvi) According to the information and explanation provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B

To the Independent Auditors’ Report of even date on the financial statements of Kinetic Engineering Limited.

Report on the Internal Financial Controls Under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We were engaged to audit the internal financial controls over financial reporting of Kinetic Engineering Limited (“the Company”) as of 31st March, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

As stated in disclaimer of opinion paragraph below, the Company has initiated the process of maintaining formal documentation regarding financial control and its effective application. As informed to us, apart from this, the Company has effectively implemented MIS process ERP modules for Financial controls and analysis, Asset Management, Sales and Distribution and Material Management etc. During the course of audit, we have checked above referred internal controls over the financial transactions entered into by the Company and could conclude such controls were present.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that, (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over

Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Disclaimer of Opinion

According to information and explanation given to us, the Company has initiated the process of formal documentation of the process being followed for internal financial control over financial reporting by drawing process control charts/ risk control matrix on criteria based on or considering the essential components of internal control as stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Since the documentation is in process, we are unable to express an opinion on adequacy of documentation of internal financial controls and the effectiveness of its operation.

We have considered the disclaimer reported above in determining the nature, timing and extent of audit tests applied in our audit of the standalone financial statements of the Company, and the disclaimer does not affect our opinion on the standalone financial statements of the Company.

For M/s P G Bhagwat

Chartered Accountants

Firm''s Registration No.: 101118W

Sandeep Rao

Partner

Pune: 28th May, 2016 Membership No. 47235

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Mar 31, 2015

We have audited the accompanying standalone financial statements of KINETIC ENGINEERING LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

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

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

Refer Note No. A-22 relating to Managerial Remuneration, which is subject to approval of Central Govt.

Refer Note No. 19 describing the basis of company's ability to continue as a Going Concern.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by The Companies (Auditor's Report) Order, 2015 issued by the Government of India (Ministry of Corporate Affairs) in terms of sub section (11) of section 143 of the Companies Act, 2013, we give in Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

(c) The Company has no branch offices whose accounts are audited by branch auditors.

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

(e) ln our opinion, the aforesaid standalone 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) There are no observations and comments on financial transactions or other matters which have an adverse effect on the functioning of the Company.

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

(h) There are no qualifications, reservations or adverse remarks relating to maintenance of accounts and other matters connected therewith.

(i) 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:

i. Refer Note No.3 on Contingent Liabilities disclosing the impact of pending litigation on the financial position of the company in its financial statements.

ii. The Company does not have any long-term contracts including derivative contracts, having any material foreseeable losses, for which provision was required.

iii. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure Re: KINETIC ENGINEERING LIMITED

Referred to in paragraph 1 under the heading, "Report on Other legal and Regulatory Requirements" of our report on even date:

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

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

(ii) (a) In our opinion and according to the information and explanations given to us, the procedure 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.

(b) In our opinion the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stock and the book records.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act.

(iv) In our opinion and according to 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 services. During the course of our audit we have not observed any major weaknesses or continuing failure to correct major weaknesses in internal control system.

(v) In our opinion and according to information and explanation given to us, the Company has not accepted deposits, hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, are not applicable to it. According to information and explanation given to us, no order has been passed against the company by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) As informed to us, the cost records, pursuant to the rules made by the Central Government for the maintenance of cost records under sub- section (I) of section 148 of the Companies Act, 2013, are under preparation.

(vii)(a) According to the records of the company, there are delays in depositing undisputed statutory dues of Provident Fund, Employees' State Insurance and Income Tax deducted at source and as such the company is not regular in depositing the same. According to the information and explanations given to us, undisputed Income Tax deducted at source amounting to Rs. 10.09 Lacs and Provident Fund amounting to Rs. 6.98 Lacs were in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, following are the details of disputed dues of, income tax, sales tax, custom duty and excise duty, which have not been deposited and the forum where such dispute is pending.

Statement of disputed dues: (Rs. In Lacs)

Nature of dues Amount Forum where dispute is pending.

Income Tax, AY 2000-01 1.29 Income Tax Appellate Tribunal, Pune

Income Tax AY 2007-08 1455.65 CIT Appeals, Pune

Income Tax AY 2009-10 186.12 CIT Appeals, Pune

Income Tax AY 2011-12 62.11 CIT Appeals, Pune

West Bengal Sales Tax, Central Sales Tax AY 2001-02, 2002-03. 6.92 Deputy Commissioner of Sales Tax, Kolkata.

CST(Pune) 2005-06 65.35 Commissioner Sales Tax, Pune

CST 2006-07 9.50 Commissioner sales Tax, Pune

CST 1994-95, 99-2000, 2000-01, 2002-03,2003-04, 2008-09, 2007-08, 2009-10 105.76 Appellate Dy. Comm. Commercial Tax, Indore

CST 1998-99, 2001-02 27.27 Appellate Dy. Comm. Commercial Tax, Indore

Sales Tax Kolkatta 2001-02 0.60 Sales Tax Tribunal, Kolcutta

Entry Tax 1994-95, 95-96, 2007-08 8.41 Dy. Comm. Commercial Tax, Indore

MP Commercial Tax 1998-99 1.88 Appellate Dy. Comm. Commercial Tax, Indore

MP Commercial Tax 1999-00, 2007-08, 08-09 14.12 Appellate Dy. Comm. Commercial Tax, Indore

CST 2000-01,2001-02 41.44 Appellate Dy. Comm. Commercial Tax, Indore

Excise Duty 121.11 CESTAT Mumbai

Excise Duty 166.19 Appellate Tribunal

(c) According to the information and explanation given to us, there are no amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The Company's accumulated losses at the end of 31st March, 2015 are not less than 50% of its net worth. The Company has not incurred cash losses in the current financial year. The Company has incurred cash losses in the immediately preceding financial year.

(ix) According to the information and explanation given to us the company has not defaulted in repayment of dues to a financial institution or bank. The Company does not have any debenture holders.

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

(xi) The Company has applied the term loans for the purpose for which the same was raised.

(xii) Based upon the audit procedures performed by us and according to the

For M/s P G Bhagwat Chartered Accountants Firm's Registration No.: 101118W

Sandeep Rao Partner Membership No. 47235

Pune: 22nd July, 2015

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Mar 31, 2014

We have audited the accompanying financial statements of Kinetic Engineering Limited, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, 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 that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''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.

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 March 31, 2014;

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

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to following matters referred to in the Notes and Notes forming part of Accounts:

Note No. 19 describing the basis of the company''s ability to continue as a Going Concern.

Note No.A-22 relating to Managerial remuneration, which is subject to approval of Central Govt.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 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 March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in paragraph 1 of our report of even date)

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

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

(c) In our opinion, the company has not disposed off a substantial part of its Fixed Assets during the period so as to affect the going concern status of the company.

(ii) (a) The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records.

(iii) (a) The Company has not granted any loan to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Clause (iii) (b) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(c) Clause (iii) (c) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(d) Clause (iii) (d) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(e) The company has taken unsecured loans from three companies and two parties covered in the register maintained under section 301 of The Companies Act 1956. The details of the unsecured loans taken are as under:

(Rs. in Lakhs)

Opening Balance Accepted during Repaid during the Closing balance the period / period/Adjusted Transferred on during the year/ merger written back during the year

3302 797 7 4087

(f) In our opinion, the rate of interest wherever applicable and the other terms and conditions of the unsecured loans taken by the company from the companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(g) In respect of the above unsecured loans, we were informed that there are no specific stipulations for repayment of the principal amount and the payment of interest wherever applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us and on the basis of our examination, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakh in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, during the period, the company has not accepted any deposits from the public to which the provisions of section 58A and 58AA or any other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. As informed to us, no order has been passed by the Company Law Board, National Company Law Tribunal, RBI, any court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) As informed to us, the Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of manufacturing activities of the company. We were informed that the maintenance of cost records is in process.

(ix) (a) According to the records of the company, there are delays in depositing undisputed statutory dues of Provident Fund, Employees'' State Insurance, Income-tax and Investor Education and Protection Fund with the appropriate authority and as such the company is not regular in depositing the same. According to the information and explanations given to us, undisputed statutory dues in respect of Income Tax deducted at source amounting to Rs.5.60 Lakhs, Provident Fund amounting to Rs.6.96 Lakhs and Investor Education Protection Fund amounting to Rs. 0.28 Lakhs (Rs. 0.28 Lakhs were deposited on 30th April 2014) were in arrears as at 31.03.2014 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, following are the details of disputed dues of, income tax, sales tax, custom duty and excise duty, which have not been deposited and the forum where such dispute is pending.

Statement of disputed dues: (Rs. in Lakhs)

Nature of dues Amount Forum where dispute is pending.

Income Tax, AY 2000-01 1.29 Income Tax Appellate Tribunal, Pune

Income Tax AY 2007-08 1455.65 CIT Appeals, Pune

Income Tax AY 2009-10 186.12 CIT Appeals, Pune

West Bengal Sales Tax, 6.92 Deputy Commissioner of Sales Tax, CentralSales Tax AY Kolkata. 2001-02, 2002-03.

CST(Pune) 2005-06 65.35 Commissioner Sales Tax, Pune

CST (Supa Unit) 2002-03 83.21 Commissioner sales Tax, Nashik

CST (Supa Unit) 2003-04 32.96 Commissioner sales Tax, Nashik

CST (Supa Unit) 2004-05 21.46 Commissioner sales Tax, Nashik

CST 2006-07 9.50 Commissioner sales Tax, Pune

CST 1994-95, 99-2000, 105.76 Appellate Dy. Comm. Commercial Tax, 2000-01, 2002-03 Indore

CST 1998-99, 2001-02 27.27 MP Commercial Tax Tribunal, Bhopal

Sales Tax Kolkatta 0.60 Sales Tax Tribunal, Kolcutta 2001-02

Entry Tax 1994-95, 8.41 Dy. Comm. Commercial Tax, Indore 95-96, 2007-08

MP Commercial Tax 1.88 MP Commercial Tax Tribunal, Bhopal 1998-99

MP Commercial Tax 14.12 Appellate Dy. Comm. Commercial Tax, 1999-00, 2007-08, 08-09 Indore

CST 2000-01, 2001-02 41.44 MP Commercial Tax Tribunal, Bhopal

Excise Duty 308.05 CESTAT Mumbai

Excise Duty 166.37 Appellate Tribunal

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

(xi) During the period the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

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

(xiii) In our opinion, 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 to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

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

(xvi) The company has applied the Term Loan for the purpose for which the same was raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet, we are of the opinion that the funds raised on short term basis amounting to Rs. 7129.87 Lakhs have been used for long term investments including losses.

(xviii) The company has not made preferential allotment of shares during the year.

(xix) During the period covered by our audit report, the company has not issued any secured debentures and there are no Debentures outstanding as on the date of Balance Sheet.

(xx) The company has not raised any money by public issues during the period.

(xxi) According to the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For M/S P. G. Bhagwat, Chartered Accountants,

Sandeep Rao Partner Membership No. 47235 Firm Registration No. 101118W

Pune: 24th May, 2014.

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Kinetic Engineering Limited, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, 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 that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to following matters referred to in the Notes and Notes forming part of Accounts:

Note No. 21 describing the basis of the company''s ability to continue as a Going Concern.

Note No.3 relating to the diminution in value of investment. As explained in the said note, the diminution is not of permanent nature and hence no provision against the same is required as per AS -13 (Accounting for Investments)

Note No.A-22 relating to Managerial remuneration for which Central Govt. approval is awaited.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 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 March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, 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 THE AUDITOR''S REPORT

(Referred to in paragraph 1 of our report of even date)

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

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

(c) In our opinion, the company has not disposed off a substantial part of its Fixed Assets during the period so as to affect the going concern status of the company.

(ii) (a) The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records.

(iii) (a) The Company has not granted any loan to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Clause (iii) (b) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(c) Clause (iii) (c) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(d) Clause (iii) (d) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(f) In our opinion, the rate of interest wherever applicable and the other terms and conditions of the unsecured loans taken by the company from the companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(g) In respect of the above unsecured loans, we were informed that there are no specific stipulations for repayment of the principal amount and the payment of interest wherever applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us and on the basis of our examination, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakh in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, during the period, the company has not accepted any deposits from the public to which the provisions of section 58A and 58AA or any other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. As informed to us, no order has been passed by the Company Law Board, National Company Law Tribunal, RBI, any court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) As informed to us, the Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of manufacturing activities of the company. We were informed that the maintenance of cost records is in process.

(ix) (a) According to the records of the company, there are delays in depositing undisputed statutory dues of Provident Fund, Employees'' State Insurance, Income-tax and Investor Education and Protection Fund with the appropriate authority and as such the company is not regular in depositing the same. According to the information and explanations given to us, undisputed statutory dues in respect of Income Tax deducted at source amounting to Rs.11.34 Lakhs, Provident Fund amounting to Rs.6.96 Lakhs and Sales Tax deferral loan amounting to Rs. 53.87 Lakhs were in arrears as at 31.03.2013 for a period of more than six months from the date they became payable.

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

(xi) During the period the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

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

(xiii) In our opinion, 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 to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

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

(xvi) The company has applied the Term Loan for the purpose for which the same was raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet, we are of the opinion that the funds raised on short term basis amounting to Rs. 2956.56 Lakhs have been used for long term investments. Current Maturities of Long Term Debts of Rs. 11308.12 Lakhs have been considered as Long Term borrowings and not as current liabilities.

(xviii) The company has not made preferential allotment of shares during the year.

(xix) During the period covered by our audit report, the company has not issued any secured debentures. As informed to us, in respect of secured debentures issued in the previous year by the merged entity (KMCL), the pledge has been created in favour of debenture holder through an escrow agreement.

(xx) The company has not raised any money by public issues during the period.

(xxi) According to the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M/S P. G. Bhagwat,

Chartered Accountants,

Sandeep Rao

Partner

Membership No. 47235

Firm Registration No. 101118W

Pune: 28th May, 2013.

---

Mar 31, 2012

We have audited the attached Balance Sheet of KINETIC ENGINEERING LIMITED, as at 31st March 2012, the statement of Profit and Loss and also 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.

We conducted our audit in accordance with the 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.

1. As required by the Companies (Auditor's Report) Order, 2003[as amended by Companies (Auditor's Report) (Amendment) Order, 2004] issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in para 1 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, 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 Companies Act, 1956;

(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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and subject to approval from Central Government, which is awaited, for managerial remuneration paid to Chairman, Vice Chairman and Managing Director, 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 Loss for the year ended on that date ; and

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

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 1 of our report of even date)

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

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

(c) In our opinion, the company has not disposed off a substantial part of its Fixed Assets during the period so as to affect the going concern status of the company.

(ii) (a) The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records.

(iii) (a) The Company has not granted any loan to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Clause (iii) (b) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(c) Clause (iii) (c) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(d) Clause (iii) (d) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(e) The company has taken unsecured loans from three companies and two parties covered in the register maintained under section 301 of The Companies Act 1956. The details of the unsecured loans taken are as under:

(Rs. in Lakhs)

Opening Balance Accepted during Repaid during the period/Closing balance the period Adjusted during the year

1860 975 732 2103

(f) In our opinion, the rate of interest wherever applicable and the other terms and conditions of the unsecured loans taken by the company from the companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(g) In respect of the above unsecured loans, we were informed that there are no specific stipulations for repayment of the principal amount and the payment of interest wherever applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us and on the basis of our examination, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakhs in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, during the period, the company has not accepted any deposits from the public to which the provisions of section 58A and 58AA or any other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. As informed to us, no order has been passed by the Company Law Board, National Company Law Tribunal, RBI, any court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) As informed to us, the Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of manufacturing activities of the company. We were informed that the maintenance of cost records is in process.

(ix) (a) According to the records of the company, there are delays in depositing undisputed statutory dues of Provident Fund, Employee's State Insurance, Income-tax and Investor Education and Protection Fund with the appropriate authority and as such the company is not regular in depositing the same. According to the information and explanations given to us, undisputed statutory dues in respect of Income Tax deducted at source amounting to Rs.18.20 Lakhs, Profession Tax Rs. 35.21 Lakhs and Investor Education and Protection Fund Rs. 0.68 Lakhs were in arrears as at 31.03.2012 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, following are the details of disputed dues of income tax, sales tax, service tax, custom duty and excise duty, which have not been deposited and the forum where such dispute is pending.

Statement of disputed dues:

( Rs. in Lakhs)

Nature of dues Amount Forum where dispute is pending.

Income Tax, AY 2000-01 1.29 Income Tax Appellate Tribunal,Pune

Income TaxAY 2007-08 1455.65 CIT Appeals, Pune

Income TaxAY 2009-10 186.12 CIT Appeals, Pune

West Bengal Sales Tax, Central 6.92 Deputy Commissioner of Sales Tax, Kolkata. Sales Tax AY 2001-02, 2002-03.

CST(Pune) 2005-06 67.91 Sales Tax Tribunal (Mumbai)

CST (Supa Unit) 2002-03 83.21 Commissioner sales Tax, Nashik

CST (Supa Unit) 2003-04 32.96 Commissioner sales Tax, Nashik

CST (Supa Unit) 2004-05 21.46 Commissioner sales Tax, Nashik

Sales Tax 2001-02 92.54 Jt. Commissioner sales Tax, Pune

Excise Duty 301.73 CESTAT Mumbai

Custom Duty 6.32 CESTAT Mumbai.

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

(xi) During the period the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

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

(xiii) In our opinion, 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 to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

(xvi) The company has not raised any Term Loan during the period.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet, we are of the opinion that the funds raised on short term basis amounting to Rs. 108.78 Lakhs have been used for long term investments.

(xviii) The company has not made preferential allotment of shares during the year.

(xix) During the period covered by our audit report, the company has not issued any debentures.

(xx) The company has not raised any money by public issues during the period.

(xxi) According to the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M/S P. G. Bhagwat, Chartered Accountants, Sandeep Rao Partner Membership No. 47235 Firm Registration No. 101118W

Pune: 30th May, 2012.

---

Mar 31, 2011

We have audited the attached Balance Sheet of KINETIC ENGINEERING LIMITED, as at 31st March 2011, the Profit and Loss account and also 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.

We conducted our audit in accordance with the 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.

1. As required by the Companies (Auditor's Report) Order, 2003[as amended by Companies (Auditor's Report) (Amendment) Order, 2004] issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in para 1 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, 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 Companies Act, 1956;

(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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and subject to approval from Central Government, which is awaited, for managerial remuneration paid as mentioned in Note No.5 under Notes forming part of the accounts 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 31 st March 2011;

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

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

ANNEXURE TO THE AUDITOR'S REPORT (Referred to in paragraph 1 of our report of even date)

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

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

(c) In our opinion, the Company has not disposed off a substantial part of its Fixed Assets during the period and the going concern status of the Company is not affected.

(ii) (a) The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records.

(iii) (a) The Company has not granted any loans to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Clause (iii) (b) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(c) Clause (iii) (c) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(d) Clause (iii) (d) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(e) The Company has taken interest free unsecured loans from two companies and two parties covered in the register maintained under section 301 of The Companies Act 1956. The details of the unsecured loans taken are as under:

(Rs. Lakhs.)

Opening Balance Accepted during Repaid during the period/ Closing balance the period Adjusted during the year.

1933 50 123 1860

(f) During the year no interest is paid on any of the unsecured loans taken by the Company. In our opinion, the other terms and conditions of the unsecured loans taken by the Company from the companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(g) In respect of the above unsecured loans, we were informed that there are no specific stipulations for repayment of the principal amount.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us and on the basis of our examination, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakh in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, during the period, the Company has not accepted any deposits from the public to which the provisions of section 58A and 58AA or any other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. As informed to us, no order has been passed by the Company Law Board, National Company Law Tribunal, RBI, any court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) As informed to us, the Central Government has prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of manufacturing activities of the company. We were informed that the maintenance of cost records is in process.

(ix) (a) According to the records of the company, there are delays in depositing undisputed statutory dues of Provident Fund, Employees' State Insurance and Income-tax with the appropriate authority and as such the company is not regular in depositing the same. According to the information and explanations given to us, undisputed statutory dues in respect of Income Tax deducted at source amounting to Rs.9.60 Lakhs, Profession Tax Rs. 35.19 Lakhs and Provident Fund dues amounting to Rs. 0.39 Lakhs were in arrears as at 31.03.2011 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, following are the details of disputed dues of, income tax, sales tax, service tax, custom duty and excise duty, which have not been deposited and the forum where such dispute is pending.

Statement of disputed dues: ( Rs. Lakhs)

Nature of dues Amount Forum where dispute is pending.

Income Tax, AY 2000-2001 1.29 Income Tax Appellate Tribunal, Pune

West Bengal Sales Tax, Central 6.92 Deputy Commissioner of Sales Tax, Kolkata. Sales Tax AY 2001 -02, 2002-03.

Entry Tax, Behrampur. 26.76 Asst. Commissioner Sales Tax, Behrampur. 1999-2000,2000-01,2001 -02.

CST (Supa Unit) 2006-07 31.46 Asst. Commissioner Sales Tax A.Nagar

CST(Pune) 2005-06 67.91 Sales Tax Tribunal (Mumbai)

CST (Supa Unit) 2002-03 83.21 Commissioner sales Tax, Nashik

CST (Supa Unit) 2003-04 32.96 Commissioner sales Tax, Nashik

CST (Supa Unit) 2004-05 21.46 Commissioner sales Tax, Nashik

Sales Tax 2001 -02 92.54 Jt. Commissioner sales Tax, Pune

Excise Duty 286.27 CESTAT Mumbai

Service Tax 57.02 CESTAT Mumbai.

Custom Duty 6.32 CESTAT Mumbai.

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

(xi) During the period the company has not defaulted in repayment of dues to financial institutions and banks. As informed to us, in respect of repayment to debenture holders, two installments amounting to Rs. 10 Crores were due up to 31st March, 2011 which was not paid as the restructuring of repayment schedule with the debenture holders was under negotiation.

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

(xiii) In our opinion, 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 to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

(xvi) The company has not raised any Term Loan during the period.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet we are of the opinion that there are no funds raised on short term basis which have been used for long term investments.

(xviii) The company has not made preferential allotment of shares during the year.

(xix) During the period covered by our audit report, the company has not issued any debentures. As informed to us, the company has created security in respect of debentures issued in the earlier accounting year.

(xx) The company has not raised any money by public issues during the period.

(xxi) According to the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M/S P.GLBhagwat,

Chartered Accountants,

Sandeep Rao

Partner

Membership No. 47235

Pune: 30th May, 2011 Firm Registration No. 101118W

---

Mar 31, 2010

We have audited the attached Balance Sheet of KINETIC ENGINEERING LIMITED, as at 31st March 2010, the Profit and Loss account and also the Cash Flow statement for the 9 months period ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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.

1. As required by the Companies (Auditors Report) Order, 2003[as amended by Companies (Auditors Report) (Amendment) Order, 2004] issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in para 1 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, 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 Companies Act, 1956;

(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)In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and subject to approval from Central Government, which is awaited, for managerial remuneration paid as mentioned in Note No.5 under Notes forming part of the accounts 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 for the 9 months period ended on that date ; and

(c) in the case of Cash Flow Statement, of the cash flows for the 9 months period ended on that date.



ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 1 of our report of even date)

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

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

(c) In our opinion, the company has not disposed off a substantial part of its Fixed Assets during the period and the going concern status of the company is not affected.

(ii) (a) The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records.

(iii)(a) The Company has not granted any loan to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Clause (iii) (b) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(c) Clause (iii) (c) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(d) Clause (iii) (d) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(e) The company had taken interest free unsecured loans from one company and two parties covered in the register maintained under section 301 of The Companies Act 1956. The details of the loans taken are as under:

(Rs. in Lakhs.)

Accepted during the period/ Repaid during the period/ Closing balance Opening Balance

Interest Credited / Transfered adjusted during the year

1845 418 330 1933

(f) During the year no interest is paid on any of the unsecured loans taken by the company. In our opinion, the other terms and conditions of the unsecured loans taken by the company from the company and other parties covered in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(g) In respect of the above unsecured loans, we were informed that there are no specific stipulations for repayment of the principal amount.

(iv)In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us and on the basis of our examination, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakh in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, during the period, the company has not accepted any deposits from the public to which the provisions of section 58A and 58AA or any other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. As informed to us, no order has been passed by the Company Law Board, National Company Law Tribunal, RBI, any court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) As informed to us, the Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of manufacturing activities of the company. We were informed that the maintenance of cost records is in process.

(ix)(a) According to the records of the company, there are delays in depositing undisputed statutory dues of Provident Fund, Investor Education and Protection Fund, Employees State Insurance and Income-tax with the appropriate authority and as such the company is not regular in depositing the same. According to the information and explanations given to us, undisputed statutory dues in respect of Income Tax deducted at source amounting to Rs.126.17 Lakhs, Profession Tax Rs. 22.26 Lakhs and Provident Fund dues amounting to Rs. 54.92 Lakhs were in arrears as at 31.03.2010 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, following are the details of disputed dues of, income tax, sales tax, service tax, custom duty and excise duty, which have not been deposited and the forum where such dispute is pending.

Statement of disputed dues:

Nature of dues Amount Forum where dispute is pending.

Rs. Lakhs

Income Tax, AY 2000-2001 1.29 Income Tax Appellate Tribunal, Pune

West Bengal Sales Tax, Central Sales Tax AY 6.92 Deputy Commissioner of Sales Tax, 2001-02, 2002-03. Kolkata.

Entry Tax, Behrampur. 1999-2000, 2000-01, 2001-02. 26.76 Asst. Commissioner Sales Tax, Behrampur.

CST (Supa Unit) 2006-07 31.46 Asst. Commissioner Sales Tax A. Nagar CST(Pune) 2005-06 67.91 Sales Tax Tribunal (Mumbai)

CST (Supa Unit) 2002-03 83.21 Commissioner sales Tax, Nashik

CST (Supa Unit) 2003-04 32.96 Commissioner sales Tax, Nashik

CST (Supa Unit) 2004-05 21.46 Commissioner sales Tax, Nashik

Excise Duty 286.27 CESTAT Mumbai

Service Tax 57.02 CESTAT Mumbai.

Custom Duty 6.32 CESTAT Mumbai.

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

(xi) During the period the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

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

(xiii) In our opinion, 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 to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

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

(xvi) The company has not raised any Term Loan during the period.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet we are of the opinion that there are no funds raised on short term basis which have been used for long term investments.

(xviii) The company has not made preferential allotment of shares during the period except shares were allotted pursuant to the Scheme of Arrangement approved by the High Court.

(xix) During the period covered by our audit report, the company has not issued any debentures. As informed to us, the company has created security in respect of debentures issued in the earlier accounting year.

(xx) The company has not raised any money by public issues during the period.

(xxi) According to the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M/s P. G. Bhagwat,

Chartered Accountants,

Sandeep Rao

Partner

Membership No. 47235

Pune, 12th August, 2010 Firm Registration No. 101118W

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Jun 30, 2009

We have audited the attached Balance Sheet of KINETIC ENGINEERING LIMITED, as at 30th June 2009, the Profit and Loss account and also the Cash Flow statement for the 15 months period ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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.

1. As required by the Companies (Auditors Report) Order, 2003[as amended by Companies (Auditors Report) (Amendment) Order, 2004] issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in para 1 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 ouraudit;

(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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv)ln 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 Companies Act, 1956; Attention is drawn to the Note No. 2 (a) of the Notes forming part of the accounts regarding incorporating effect of the merger of Auto Division of erstwhile Jaya Hind SciakyLtd., having effective date of 10"August 2009, in the accounts for the 15 months ended 30th June 2009.

(v) On the basis of written representations received from the directors, as on 30th June 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and subject to approval from Central Government, which is awaited, for managerial remuneration paid as mentioned in Note No.5 under Notes forming part of the accounts 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 30th June 2009;

(b) in the case of the Profit and Loss account, of the Loss for the 15 months period ended on that date; and

(c) in the case of Cash Flow Statement, of the cash flows for the 15 months period ended on that date.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 1 of our report of even date)

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

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

(c) In our opinion, the company has not disposed off a substantial part of its Fixed Assets during the period and the going concern status of the company is not affected.

(ii) (a) The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records.

(iii)(a) The Company has not granted any loan to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Clause (iii) (b) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(c) Clause (iii) (c) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(d) Clause (iii) (d) is not applicable as no loans have been granted to the parties covered under (iii) (a).

(e) The company had taken unsecured loans from two companies covered in the register maintained under section 301 of The Companies Act 1956, out of which during the current financial year one of the companies is merged with the company. During the year company has taken loans from two parties covered in the register maintained under section 301 of The Companies Act 1956. The details of the loans taken are as under:

(Rs. in Lakhs.)

Opening Balance Accepted during the period/ Repaid during the period/ closing balance Interest Credited / Transfered adjusted during the year

5426 612 4193 1845

(f) During the year no interest is paid on any of the unsecured loans taken by the company. In our opinion, the other terms and conditions of the unsecured loans taken by the company from the companies and other parties covered in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(g) In respect of the above unsecured loans, we were informed that there are no specific stipulations for repayment of the principal amount.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us and on the basis of our examination, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of rupees five lakh in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, during the period, the company has not accepted any deposits from the public to which the provisions of section 58Aand 58AAor any other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. The liability of the company towards a relative of a director, arising out of forced encashment of the pledged security by a lender, has not been considered by the company to be a deposit covered by the provisions of the Companies (Acceptance of Deposits) Rules, 1975. As informed to us, no order has been passed by the Company Law Board, National Company Law Tribunal, RBI, any court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) As informed to us, the Central Government has prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of manufacturing activities of the company. We were informed that the maintenance of cost records is in process.

(ix)(a) According to the records of the company, there are delays in depositing undisputed statutory dues of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax and Service Tax with the appropriate authority and as such the company is not regular in depositing the same. According to the information and explanations given to us, undisputed statutory dues in respect of Income Tax deducted at source amounting to Rs.28.33 Lakhs, Investor Education and protection Fund Rs. 3.70 Lakhs and Profession Tax Rs. 8.50 Lakhs were in arrears as at 30.06.2009 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, following are the details of disputed dues of, Income tax, sales tax, service tax, customs duty and excise duty, which have not been deposited and the forum where such dispute is pending.

Statement of disputed dues:

Nature of dues Amount Forum where dispute is pending.

Rs.Lakhs

Income Tax, AY 2000-2001 1.29 Income Tax Appellate Tribunal, Pune

West Bengal Sales Tax, Central Sales Tax 6.92 Asst. Commissioner Commercial AY 2001-02, 2002-03. Taxes, West Bengal.

Entry Tax, Behrampur. 1999-2000, 2000-01, 2001-02. 26.76 Sales Tax Tribunal, Cuttack.

CST (Supa Unit) 2006-07 31.46 D.C. Sales Tax (Appeals), Nasik

CST(Pune) (Rs.10 Lakhs paid in 09-10) 77.91 Sales Tax Tribunal (Mumbai)

Excise Duty 389.73 CESTAT Mumbai

Excise Duty 0.02 Commissioner (Appeals)

Service Tax 57.02 CESTAT Mumbai.

Customs Duty 6.32 CESTAT Mumbai.

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

(xi) During the period the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders however there were minor delays in repayment to the debenture holders. Instalment due on 30th June 2009 was paid on 28th October 2009.

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

(xiii) In our opinion, the company is not a chit fund or a nidhi I mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bankorfinancial institutions.

(xvi) The company has not raised any Term Loan during the period.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet we are of the opinion that there are no funds raised on short term basis which have been used for long term investments.

(xviii) The company has made preferential allotment of shares during the period to a company covered in the register maintained under section 301 of The Companies Act 1956. The price, which is in accordance with the SEBI (Disclosure & Investor Protection) Guidelines, 2000, is not prejudicial to the interest of the company.

(xix) During the period covered by our audit report, the company has not issued any debentures. As informed to us, the company has created security in respect of debentures issued in the earlier accounting year.

(xx) The company has not raised any money by public issues during the period.

(xxi) According to the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M/s P. G. Bhagwat,

Chartered Accountants,

Sandeep Rao

Partner Membership No. 47235 Pune: 2ndMarch,2010.