Redington India Ltd

REDINGTON (INDIA) LIMITED

We have examined the attached abridged Balance Sheet of Redington (India) Limited ("theCompany"), as at March 31, 2011 and also the abridged Profit and Loss Account and theCash Flow Statement for the year ended on that date both annexed thereto, together withsignificant notes thereon. These abridged financial statements have been prepared by theCompany pursuant to Rule 7A of the Companies (Central Government’s) General Rules andForms, 1956 and are based on the audited financial statements of the Company for the yearended March 31, 2011 prepared in accordance with the provisions of sub-section 3(C) ofSection 211 of the Companies Act, 1956 and covered by our report of even date to themembers of the Company, which is attached hereto.

AUDITORS’ REPORT TO THE MEMBERS OF REDINGTON (INDIA) LIMITED

1. We have audited the attached Balance Sheet of REDINGTON (INDIA) LIMITED("the Company") as at 31st March, 2011, the Profit and Loss Account and the CashFlow Statement of the Company for the year ended on that date, both annexed thereto. Thesefinancial statements are the responsibility of the Company’s Management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and the significant estimates made by the Management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued bythe Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclosein the Annexure a statement on the matters specified in paragraphs 4 and 5 of the saidOrder.

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

(a) we have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as it appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealtwith by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash FlowStatement dealt with by this report are in compliance with the Accounting Standardsreferred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts give the information required by the Companies Act, 1956 inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2011;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.

5. On the basis of the written representations received from the Directors as on 31stMarch, 2011 taken on record by the Board of Directors, none of the Directors isdisqualified as on 31st March, 2011 from being appointed as a director in terms of Section274(1)(g) of the Companies Act, 1956.

(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company’s business/activities/result,clauses (viii), (x), (xii), (xiii), (xiv), (xviii) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us, no material discrepancies were noticed on suchverification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial part of the fixed assets of the Company and such disposal has, in our opinion,not affected the going concern status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by anexternal firm of chartered accountants at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and according to the information and explanations given to us, theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/fromcompanies, firms or other parties listed in the Register maintained under Section 301 ofthe Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the company and thenature of the business with regards to purchases of the inventory and fixed assets and thesale of goods and services. During the course of our audit we have not observed any majorweakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained inpursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge andbelief and according to the information and explanations given to us, we are of theopinion that there are no transactions that need to entered in the register maintainedunder section 301 of the companies act 1956.

(vii) According to the information and explanations given to us, the Company has notaccepted any deposit from the public during the year. In respect of unclaimed deposits,the Company has complied with the provisions of Sections 58A & 58AA or any otherrelevant provisions of the Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensuratewith the size and the nature of its business.

(ix) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has been regular in depositing undisputed dues, including ProvidentFund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax,Sales Tax/Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other materialstatutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax,Custom Duty, Cess and other material statutory dues in arrears as at 31st March, 2011 fora period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty andCess which have not been deposited as on 31st March, 2011 on account of disputes are givenbelow:

(x) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in the repayment of dues to banks, financial institutions anddebenture holders.

(xi) In our opinion and according to the information and explanations given to us, theterms and conditions of the guarantees given by the Company for loans taken by others frombanks and financial institutions are not prima facie prejudicial to the interests of theCompany.

(xii) In our opinion and according to the information and explanations given to us, theterm loans have been applied for the purposes for which they were obtained.

(xiii) In our opinion and according to the information and explanations given to us andon an overall examination of the Balance Sheet, we report that funds raised on short-termbasis have not been used during the year for long- term investment.

(xiv) According to the information and explanations given to us, during the periodcovered by our audit report, the Company had issued only unsecured debentures and as suchno security/ charge needs to be created.

(xv) The Management has disclosed the end use of money raised by public issues and wehave verified the same.

(xvi) To the best of our knowledge and according to the information and explanationsgiven to us, no fraud by the Company and no fraud on the Company has been noticed orreported during the year.