7. According to the information and explanations given to us, the Company has an internal audit system commensurate withthe size and nature <strong>of</strong> its business.8. According to information and explanations given to us, the Central Government has not prescribed maintenance <strong>of</strong> costrecords under clause (d) <strong>of</strong> sub section (1) <strong>of</strong> section 209 <strong>of</strong> the <strong>Companies</strong> Act, 1956.9. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including ProvidentFund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax,Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. However an amount <strong>of</strong> Rs. 38,316 relatingto Employees' State Insurance in respect <strong>of</strong> Gurgaon Office has not been deposited due to non allotment <strong>of</strong> Employees'State Insurance Sub-Code number by ESIC authorities.(b) According to the information and explanations given to us and on the basis <strong>of</strong> our examination <strong>of</strong> the books <strong>of</strong> accounts,no undisputed amounts payable in respect <strong>of</strong> Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty and Cess werein arrears at the year-end for a period <strong>of</strong> more than six months from the date they became payable.(c) According to the information and explanations given to us and the records <strong>of</strong> the Company examined by us, there areno dues <strong>of</strong> Sales Tax, Wealth Tax, Excise Duty and Cess which have not been deposited on account <strong>of</strong> any dispute exceptthe following in respect <strong>of</strong> Custom Duty, Income Tax and Service Tax along with the forum where the dispute is pending:Name <strong>of</strong> Nature <strong>of</strong> Amount* Financial Forum whereStatute Dues (Rs. in lacs) Year to which dispute pendingamount relatesCustoms Act, 1964 Custom Duty 195.03* 1989-91 Custom Departmentincluding penaltyIncome Tax Act, 1961 Income Tax 391.51 2006-07 Commissioner <strong>of</strong>Income Tax (Appeals)Finance Act, 1994 Service Tax 603.94 2007-08 CESTAT*net <strong>of</strong> deposit <strong>of</strong> Rs. 60 lacs10. The Company does not have any accumulated losses. The Company has not incurred cash losses in the current financialyear and in the immediately preceding financial year.11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment<strong>of</strong> dues to any financial institution or bank. The Company has not issued any debentures during the year.12. In our opinion and according to the information and explanations given to us, the Company has not granted loans andadvances on the basis <strong>of</strong> security by way <strong>of</strong> pledge <strong>of</strong> shares, debentures and other securities.13. The Company is not a chit fund or a nidhi/ mutual benefit fund/society. Hence, the provisions <strong>of</strong> clause 4(xiii) <strong>of</strong> the Orderare not applicable to the Company.14. In our opinion the Company is not primarily dealing in or trading in shares, securities, debentures and other investments.Accordingly, the provisions <strong>of</strong> clause 4(xiv) <strong>of</strong> the order are not applicable.15. The Company has provided corporate guarantee amounting to US$ 42.50 million (equivalent to Rs. 18946.50 lacs) to AxisBank Limited, Singapore Branch as a collateral security for providing financial assistance to its two Joint Venture <strong>Companies</strong>,Discovery Drilling Pte. Ltd., Singapore (DDPL) & Virtue Drilling Pte. Ltd., Singapore (VDPL). Further, the Company haspledged its 100% investment in the DDPL and VDPL to the lenders <strong>of</strong> the respective Joint Venture <strong>Companies</strong>. The termsand conditions <strong>of</strong> the aforesaid arrangements are not, prima facie, prejudicial to the interest <strong>of</strong> the Company.16. On the basis <strong>of</strong> records made available and according to information and explanations given to us, the Company hasapplied its term loans for the purposes for which the loans were obtained.17. According to the information and explanations given to us and on an overall examination <strong>of</strong> the Balance Sheet <strong>of</strong> theCompany, we <strong>report</strong> that no funds raised on short term basis have been used for long term investment.30
18. According to the information and explanations given to us, the Company has not made any preferential allotment <strong>of</strong>shares to parties and companies covered in the register maintained under section 301 <strong>of</strong> the <strong>Companies</strong> Act, 1956.19. The Company has not issued any debentures during the year.20. Since the Company has not raised any money during the year by way <strong>of</strong> public issue, the provisions <strong>of</strong> clause 4(xx) <strong>of</strong> theOrder are not applicable to the Company.21. Based upon the audit procedure performed for the purpose <strong>of</strong> <strong>report</strong>ing the true and fair view <strong>of</strong> the financial statementsand on the basis <strong>of</strong> the information and explanations given by the management, we <strong>report</strong> that no fraud on or by thecompany has been noticed or <strong>report</strong>ed during the course <strong>of</strong> our audit.For S.S. KOTHARI MEHTA & CO.Chartered AccountantsFirm’s Regn. No. 000756NPlace : GurgaonDate : 3rd August, 20011K.K.TULSHANPartnerMembership No. 08503331
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