We have audited the accompanying financial statements of Toyama Electric Limited ('the Company') which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the 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 flow of the company in accordance with the accounting principles generally accepted in India, including Accounting Standards notified under the Companies Act. 1956 ("The Act") read with General circular 15/ 2003 dated 13th September, 2013 issued by Ministry of Corporate Affairs in respect of section 133 of the Companies Act,2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give 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 Char red 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.

Basis for Qualified Opinion

The Company has not done (he actuarial valuation of the liability towards the employee gratuity (amount unascertained). Provision for gratuity liability has been made on the management estimate and on the basis of a gratuity report given by the Life Insurance Corporation of India, which constitutes a departure from the accounting standard AS 15 referred to in sub-section 3C of Section 211 of the Companies Act, 1956.Refer note no 33 (b) of the Notes to financial statements.

Qualified Opinion

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31" March 2014;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4 A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in * paragraphs 4 and 5 of tile 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. except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, the 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

e. on the basis of written representations received from the directors as on 31st March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure to the Independent Auditors' Report

(Referred to in paragraph 1 under "Report on other legal and regulatory requirements" of our report of even date on the financial statements for the year ended on 31st March, 2014 of Toyama Electric Limited

(i)

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

(b) All the assets have been physically verified by the Management during the year and there is a regular programme of verification, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on the verification.

(c) The Company has not disposed off a substantia] part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii)

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

(b) 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) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have properly dealt with in the books of account.

(iii)

(a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (a) to (d) of the Order are not applicable to the Company and hence not commented upon.

b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(vi) 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 Raw Materials, stores, components. Plant and Machinery, Equipment and other assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v)

(a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the Register maintained under Section 301 of the Companies Act. 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements exceeding Rs Five Lakhs each which have been made at prices, which are not reasonable having regard to the prevailing market prices, for such goods, materials or service at the relevant time.

(vi) According to the information and explanations given to us, the Company has not accepted any deposits Under Section 58A of the Companies Act, 1956.

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

(viii) We have broadly reviewed the books of account and records maintained by the Company pursuant to the Rules made by Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made detailed examination of the records for determining whether they are accurate or complete.

(ix)

(a) According to information and explanation given to us, and as per our verification of records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund and Employees State Insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amounts payable in respect of income tax wealth tax, sales tax, customs duty, excise duty and cess were in arrears as at 31st March 2014 tor a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us there are no dues of sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

(x) The Company does not have any accumulated losses as at the end of the financial year and has however incurred cash Josses during the financial year.

(xi) Based on the information and explanations given by the management, anti as reflected in the books the Company did not have any outstanding dues to any financial institution or bank.

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

(xiii) In our opinion and according to the information and explanations given to us, 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) According to information and explanations given to us, Company is not a dealer or trader in share, securities, debentures and other securities.

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

(xvi) According to the information and explanation given to us and as per the books of account the Company has not taken any term loans during the year.

(xvii) According to the information and explanations given to us and as per the hooks of account the Company has not raised any funds on short term basis.

(xviii) The Company has not made any preferential allotment of shares to any parties during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issue during ihe year.

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

                                       For K.S.AIYAR & CO.,
                                       Chartered Accountants
                                       Firm Registration Number 100186W