Ushdev International Ltd

Auditor’s Report to the Members of Ushdev International Limited

1. We have audited the attached Balance Sheet of Ushdev International Limited asat March 31, 2012 and also the Statement of Profit and Loss and the Cash Flow Statementfor the year ended on that all of which we have signed under reference to this report.These financial 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 misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overallfinancial statements presentation. We believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 and as amended byCompanies (Auditor’s Report) (Amendment) Order, 2004 (together the “Order”)issued by the Central Government of India in terms of Section 227 (4A) of the CompaniesAct, 1956, we annex hereto a statement on the matters specified in paragraph 4 and 5 ofthe said order.

4. We report that -

i. We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purpose of our audit.

ii. In our opinion, proper books of account as required by law have been kept by theCompany so far as appears from our examination of such books.

iii. The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account.

iv. In our opinion and to the best of our information and according to the explanationsgiven to us, the Balance Sheet and the Profit & Loss Account and Cash Flow Statementread with the Notes thereon comply with the Accounting Standards referred to in Section211(3C) of the Companies Act, 1956 to the extent applicable.

v. On the basis of written representations received by the Company from directors asregards their eligibility to assume and occupy office as directors as on March 31, 2012,we report that none of the Directors is disqualified as on March 31, 2012 from beingappointed as a Director under Section 274(1)(g) of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanationsgiven to us, the Balance Sheet, the statement of Profit & Loss and the Cash FlowStatement read with the Notes thereon give the information as required by the CompaniesAct, 1956 in the manner so required and give a true and fair view: -

(a) in respect of the Balance Sheet, of the state of affairs of the Company as at March31, 2012 and

(b) in respect of Statement of Profit and Loss, of the Profit for the year ended onthat date.

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

Annexure referred to in paragraph (4) of our report of even date

1. a. The Company has maintained proper records for fixed assets showing fullparticulars, including quantitative details and situation of fixed assets.

b. The Management has during the year conducted physical verification of the majorfixed assets. We are informed that no major discrepancies were noticed on suchverification.

c. Based on our examination of the records of the Company, we find that no substantialpart of the fixed assets has been disposed off during the year.

2. a. Inventories have been physically verified by the Management during the year. Inour opinion, the frequency of such verification is reasonable.

b. In our opinion, the procedure of physical verification of inventories followed bythe management is reasonable and adequate in relation to the size of the Company and thenature of its business.

c. In our opinion, the Company maintains proper records of inventory. We are informedthat no material discrepancies were noticed on physical verification.

3. a. The Company has taken / granted unsecured loans to companies/ firms or otherparties covered in the register maintained under Section 301 of the Act. Details ofparties and the amount involved are as under.

(Rs. in Lakhs)

b& c. The interest free loans do not stipulate any terms and conditions of paymentand in our opinion are prima facie not prejudicial to the interest of the Company.

d. In view of the above, the question of regularity of payment of principal andinterest does not arise.

4. In our opinion and according to the information and explanations given to us, thereis an adequate internal control procedure commensurate with the size of the Company andthe nature of its business for the purchase of inventory and fixed assets and sale ofgoods. Further on the basis of our examination and according to the information andexplanations given to us, we have neither come across nor have been informed of anyinstance of major weakness in the aforesaid internal control procedures.

5. In respect of transactions entered in the register maintained in pursuance ofSection 301 of the Companies Act, 1956,

(a) To the best of our knowledge and belief and according to the information andexplanations given to us, we are of the opinion that the transactions that neededto be entered into the register maintained under Section 301 have been so entered.

b) According to the information and explanations given to us there are certaintransactions where the company has availed services in excess of R 5 lakhs withsome parties / companies listed in the register maintained under section 301. Inrespect of such services, we are informed that these have been made atmutually agreed prices for which suitable alternatives do not exist to compare withthe prevailing market price

6. As per the information and explanations given to us the Company has not accepted anydeposits from public. Consequently the directives issued by Reserve Bank of India and theprovisions of sections 58A and 58AA of the Act and the rules framed there under are notapplicable.

7. In our opinion, the Company’s Internal Audit System is commensurate with itssize and nature of its business.

8. As required by the Companies (Cost Accounting Records) Rules, 2011, the Company hasobtained a compliance report of the cost accountant in respect of the accuracy andcompleteness of the cost records maintained by the Company relating to activities of Powergeneration.

9. a. According to the information and explanations given to us and on the basisof books and records produced and examined by us, undisputed statutory dues havegenerally been regularly deposited with the appropriate authorities and that thereare no statutory dues that are outstanding for more than six months at theend of the year.

b. As at the year-end, according to the records of the Company and informationand explanations given to us, there are no disputed dues on account of income tax,sales tax, customs duty, excise duty, cess, wealth tax, service tax which have notbeen deposited with respective authorities.

10. The Company does not have any accumulated losses as at March 31, 2012 and has notincurred any cash losses during the financial year ended on that date or in theimmediately preceding financial year.

11. As per books and records maintained by the Company and according to the informationand explanations given to us, the Company has not defaulted in repayment of dues to anyfinancial institution or bank.

12. The Company has not granted any loans and advances on the basis of security by wayof pledge of shares, debentures and other securities.

13. The Company is not a chit fund / nidhi /mutual benefit fund / society. Hence, theprovisions of any special statute as specified under clause (xiii) of Paragraph 4 of theOrder are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, theCompany is not a dealer or trader in securities.

15. According to the information and explanations given to us, the Company has givenguarantees for loans taken by its foreign subsidiaries from banks or financialinstitutions, which in our opinion are generally not prima-facie prejudicial to theinterest of the Company.

16. Based on the information and explanations given to us, we find that the Company hasutilized the term loans for the purpose they were obtained.

17. According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the Company, in our opinion, the fund raised by theCompany on short-term basis have not been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties/companiescovered in the register maintained u/s 301 of the Companies Act 1956.

19. The Company has not issued any debentures.

20. The Company has not raised any money through a public issue during the year.

21. Based on information and explanations furnished by the management, which have beenrelied upon by us, no frauds on or by the Company were noticed or reported during theyear.