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Auditor Report of Adhunik Metaliks Ltd.

Mar 31, 2016

TO THE MEMBERS OF ADHUNIK METALIKS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Adhunik Metaliks Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the nine months period then ended, and a summary of 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.

Auditor''s 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 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 standalone financial statements.

Basis of Qualified Opinion

We draw attention to Note 13 of the financial statements with regard to the recognition of deferred tax assets amounting to Rs, 26,413.41 lacs (P.Y Rs, 13,336.06), on unabsorbed depreciation, business losses and other timing differences incurred by the Company. Based on the unexpected orders on hand, the management is confident that sufficient future taxable income will be available against which such deferred tax assets will be realized. However, based on our review, we conclude that, in absence of virtual certainty supported by convincing evidence that sufficient taxable income will be available against which the deferred tax assets can be realized, such recognition is not consistent with the principles enunciated under Accounting Standard 22, Accounting for Taxes on Income (AS 22).

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 of Qualified Opinion paragraph above, 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, 2016, its loss and its cash flows for the period ended on that date.

Emphasis of Matter

We draw attention to the fact that the Company has made long term investments in Adhunik Power and Natural Resources Limited amounting to Rs, 1,000.02 lacs comprising of 4,200,000 equity share @ Rs, 23.81 per share. The said investments continue to be valued at cost. Due to non availability of audited financial statements for the financial year 2015-16, we have relied on audited financial statements of Adhunik Power and Natural Resources Limited for the year ended 31st March 2015, where book value is at Rs, 6.69 per share, leads to decline in the value of investment. However, the company has not made diminution in value of its investments as required under Accounting Standard 13 - Accounting for Investments, as it considers such investment is a long term strategic investment and in view of the management such diminution are temporary in nature. Accordingly, impact, if any, on the standalone financials is currently not ascertainable.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

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. except for the effects of the matter described in the Basis for Qualified Opinion in the paragraph above, 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. except for the effects of the matter described in the Basis for Qualified Opinion in the paragraph above in 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;

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"; and

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

The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the period ended 31st March 2016, we report that:

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

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

(c) As per information and explanation given to us by the management, all the title deeds of the immovable properties are held in the name of the Company;

(ii) As explained to us inventories were physically verified during the period by the management at reasonable intervals. As the Company''s inventory of raw material and finished goods mostly include bulk materials which require technical expertise for establishing the quantity thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above verification by independent expert agencies and according to information and explanation furnished to us, the litigations on its financial position in its financial statements as stated in Note No. 30 to the financial statements.

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 delay in transferring amounts, to the Investor Education and Protection Fund by the Company

Other Matters

We did not audit the financial statements of a foreign branch included in the standalone financial statements of the Company whose financial statements reflect total assets (net) of '' 954.04 lacs as at 31st March, 2016 and total revenues of '' Nil for the period ended on that date, as considered in the standalone financial statements. The financial statements of this branch have been audited by the branch auditor whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such branch auditor.

procedures 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. In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us and on the basis of our examination of the books of account, 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. Consequently, the provisions of paragraph iii (a), iii(b) and iii(c) of the Order are not applicable to the Company and hence, not commented upon;

(iv) In our opinion and according to information and explanations given to us, the Company has not made any loans, investments or guarantees. However company has pledged a part of its investment in the earlier years, for the loans taken by its wholly owned subsidiary from banks and financial institutions, the terms and conditions thereof, in our opinion prima-facie prejudicial to the interest of the Company;

(v) The Company has not accepted any deposit from the public covered under Section 73 to 76 of the Companies Act, 2013. Therefore, the provisions of paragraph 3(v) of the Order is not applicable to the Company;

(vi) According to the information and explanations given to us, in our opinion, the Company have, prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

Nature of statute	Nature of dues	Amount (Rs, in Lacs)	Period to which the amount relates
Income Tax Act, 1961	Tax Deducted at Source	23.79	May 2015 to August 2015
Finance Act, 1994	Service Tax on reverse charge mechanism	4.99	May 2015 to August 2015
Employees'' State Insurance Act, 1948	Employees'' Share and ESI on contractors	0.32	April 2015 to May 2015

b) According to the information and explanation given to us, the following dues of vat, sales-tax, central sales tax, excise, service tax and ESI have not been deposited by the company on account of dispute as at 31st March, 2016:

Name of statute	Nature of dues	Amount (Rs, in Lacs)	Period to which the amount relates	Forum where dispute is pending
Central Sales Tax	Disallowance of Sale against Form-C, Form-H and transfer of stock to branches	179.84	2004-05, 2005-06 & 2007-08	Additional Commissioner of Sales Tax, Orissa Sales Tax Tribunal, Cuttack
	Sales tax has arisen due to pending C/F/H Forms and Supporting document for Deemed Export.	17.30	2011-12 & 2012-13	Additional Commissioner of Sales Tax, Sambalpur
	On assessment for 2005-06 shortfall in Sales tax has arisen due to pending C Forms, H Forms and F Forms. For 2003-04 Demand raised on the basis of discrepancies identified on the basis of fraud investigation conducted by the department. On the basis of fraud investigation report demand has been raised. The Company has filed an appeal on the ground of arbitrary and time barred	34.28	2003-04 & 2005 -06	The Joint. Commissioner of Sales Tax, Rourkela
	Disallowance for sale against Form-C	2.30	2009-10	Sr. Jt Commissioner, Chowringhee Circle, Kolkata
Central Excise and Service Tax	Dispute towards Cenvat Credit on structural steel used for construction of capital goods, input and disallowance of Service Tax on Commission Income	2,121.14	2003-09	C E S T A T (KOLKATA)

(vii) a) According to the information and explanation given to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Value Added Tax, cess or other material statutory dues have been generally regularly deposited during the period by the Company with appropriate authorities.

According to the information and explanation given to us no undisputed statutory dues including Provident Fund, Income Tax, Service Tax, Value Added Tax, cess or other material statutory dues were in arrears as at 31st March, 2016 for a period of more than six months from the date they become payable except in following cases:

(viii) Based on the records examined by us and as per the information and explanations given to us, the Company during the period has not defaulted in repayment of principal amount to the banks and financial institutions. There were no outstanding debentures as on the balance sheet date.

Nature of statute	Nature of dues	Amount (Rs, in Lacs)	Period to which the amount relates	Forum where dispute is pending
	Dispute towards Cenvat Credit on Capital goods & input	1099.96	2006-11	Before Commissioner, Jt. Commissioner, Addl. Commissioner, Commissioner (Appeal) Bhubaneswar
	Dispute towards Cenvat Credit on input.	16.20	2005-11	Before Dy. Commissioner, Asst. Commissioner, Rourkela
Orissa Entry Tax	Entry Tax on machinery & spares and Capital Goods, Interest & Penalty for late filling of return	121.52	2011-12 & 2012-13	Addl. Commissioner of Sales Tax, Sambalpur
Orissa Entry Tax	Entry Tax on machinery & spares & Capital Goods	59.92	2002-05 & 2007-08	Additional Commissioner of Sales Tax, The Orissa Sales Tax Tribunal, Cuttack
Orissa Value Added Tax	Disallowance of Input Tax credit.	123.27	2005-06 & 2006-07	High Court Of Orissa, Cuttack
	Disallowance of Input Tax credit.	430.88	2005-06 & 2011-12	The Orissa Sales Tax Tribunal, Additional Commissioner of Sales Tax, Cuttack
	Disallowance of Input Tax credit, Interest & Penalty for late filling of return	3.64	2012-13	Add. Commissioner of Sales Tax, Sambalpur
Orissa Sales Tax	Demand against discrepancies identified during investigation	12.71	2003-04 & 2004-05	Jt. Commissioner of Sales Tax, Dy. Commissioner, Rourkela
Orissa Sales Tax	Dispute on gross turnover vis-a-vis taxable turnover	5.98	2003-04	The Orissa Sales Tax Tribunal, Cuttack
West Bengal Value Added Tax	Disallowance of input tax credit, Addition of Turnover	229.31	2007 to 2012	Sr. Joint Commissioner, Chowringhee circle, Kolkata
Employees State Insurance Act,1948	Non Payment of ESI dues for Companies and Contractors Employees	34.30	2011-12	ESI Commissioner, Rourkela
	Total	4,492.55

(ix) According to information and explanation given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the period. Accordingly paragraph 3(ix) of the Order is not applicable.

(x) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the period, nor have we been informed of such case by the management;

(xi) According to information and explanation given to us, the Company has not paid or provided any managerial remuneration and hence paragraph 3(xi) is not applicable;

(xii) In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company and hence the paragraph 3(xii) is not applicable;

(xiii) In our opinion and on the basis of information and explanation given to us by the management, all the transactions with the related parties are in compliance with sections 177 and 188 of

Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;

(xiv) According to information and explanation given to us the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review;

(xv) According to information and explanation given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the paragraph 3(xv) is not applicable to the Company;

(xvi) In our opinion and on the basis of information and explanation given to us by the management, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B to the Auditor''s Report

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

We have audited the internal financial controls over financial reporting of Adhunik Metaliks Limited ("the Company") as of 31st March, 2016, in conjunction with our Audit of the Standalone Financial Statements of the Company for the period 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 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. Auditors'' 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, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and, 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.

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 judgment, 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 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.

Opinion

In our opinion, 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 31st March, 2016, 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.

For Das & Prasad

Chartered Accountants

(Firm''s Registration No.-303054E)

Anil Kumar Agarwal

Place: Kolkata (Partner)

Dated: 26th May, 2016 (Membership No.-062368)

Jun 30, 2015

We have audited the accompanying standalone financial statements of ADHUNIK METALIKS LIMITED ("the Company"), which comprise the Balance Sheet as at 30th June, 2015, 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 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.

Auditor's 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 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, 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 obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below, 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 30th June, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

a) We draw attention to the fact that the Company had locked out its plant w.e.f 13th February, 2015 till 15th May, 2015, due to adverse business conditions. In view of such lock out, the company has not made provision for most of the employees' salary at plant and related statutory obligation for the lock out period, the amount of which is not ascertainable.

b) With reference to Note No 6.2 of the financial statement, the company has recognized Net Deferred Tax Assets amounting to Rs. 13,336.06 lacs up to 30th June, 2015 based on the future profitability projections made by the management. The management is of the view that sufficient future taxable income will be available against which such deferred tax assets can be adjusted.

Our Opinion is not modified in respect of above matters

Other Matters

We did not audit the financial statements of one foreign branch included in the standalone financial statements of the Company whose financial statements reflect total assets (net) of Rs,917.62 lacs as at 30th June, 2015 and total revenues of Rs. Nil for the year ended on that date, as considered in the standalone financial statements. The financial statements of this branch have been audited by the branch auditor whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 Cash Flow Statement 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 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 30th June, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 30th June, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f) The matters describes in the 'Emphasis of Matter' paragraph above, in our opinion, may not have an adverse effect on the functioning of the company.

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 as stated in Note No. 29 to the financial statements.

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

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

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

(i) In respect of fixed assets:

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

b. The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of three/reasonable intervals which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(ii) In respect of Inventory:

a. As explained to us inventories were physically verified during the year by the management at reasonable intervals.

b. As the Company's inventory of raw material and finished goods mostly include bulk materials which require technical expertise for establishing the quantity thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above verification by independent expert agencies and according to information and explanation furnished to us, the procedures 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.

c. In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us and on the basis of our examination of the books of account, 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, 2013. Consequently, the provisions of clauses iii (a) and iii (b) of the order are not applicable to the Company and hence, not commented upon.

(iv) In our opinion and according to the information and explanations given to us there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets, sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weakness in the internal controls has been noticed.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public covered under Section 73 to 76 of the Companies Act, 2013. Therefore, the provisions of the clause 4 (v) of the Order are not applicable to the Company.

(vi) According to the information and explanations given to us, in our opinion, the Company have, prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

(vii) (a) According to the information and explanation given to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Value Added Tax, cess or other material statutory dues have been generally regularly deposited during the year by the Company with appropriate authorities.

According to the information and explanation given to us no undisputed statutory dues including Provident Fund, Income Tax, Service Tax, Value Added Tax, cess or other material statutory dues were in arrears as at 30th June, 2015 for a period of more than six months from the date they become payable except in following cases:

Nature of statute Nature of dues Amount Period to which (Rs. in Lacs) the amount relates

Income Tax Act, 1961 Tax Deducted at Source 377.05 April 2014 to November 2014

Finance Act, 1994 Service Tax on reverse charge 2.68 October2014 to mechanism November 2014

The Central Excise Act, 1944 Excise duty 266.67 September 2014 to November 2014

Employees' Provident Funds Employees' Share, Employer 40.29 November 2014 Scheme, 1952 share and PF on contractors

Employees' State Insurance Employees' Share and ESI on 5.33 November 2014 Act, 1948 contractors

(b) According to the information and explanation given to us, the following dues of sales-tax have not been deposited by the company on account of dispute as at 30th June, 2015:

Nature of Nature of dues Amount Period to statute (Rs. in which the Lacs) amount relates

Central Disallowance of Sale against 179.84 2004-05, Sales Tax Form-C, Form-H and transfer of 2005-06 & stock to branches 2007-08

Sales tax has arisen due to 17.30 2011-12 & pending C/F/H Forms and Supporting 2012-13 document for Deemed Export.

On assessment for 2005-06 shortfall in 14.22 2003-04 & Sales tax has arisen due to pending 2005 -06 C Forms, H Forms and F Forms. For 2003-04 Demand raised on the basis of discrepancies identified during investigation

Disallowance for sale against Form-C 2.30 2009-10

Central Dispute towards Cenvat Excise and Credit on 2,121.14 2003-09 structural steel used service Tax for construction of capital goods, input and disallowance of Service Tax on Commission Income

Dispute towards Cenvat Credit on 763.42 2006-11 capital goods & input.

Dispute towards Cenvat Credit on input. 16.20 2005-11

Orissa Entry Entry Tax on machinery & spares and 121.52 2011-12 & Tax Capital Goods, Interest & Penalty for 2012-13 late filling of return

Entry Tax on machinery & spares & 59.92 2002-05 & Capital Goods 2007-08

Orissa Value Disallowance of Input Tax credit. 123.27 2005-06 & Added Tax 2006-07

Disallowance of Input Tax credit. 430.88 2005-06 & 2011-12

Disallowance of Input Tax credit, 3.64 2012-13 Interest & Penalty for late filling of return

Orissa Demand against discrepancies identified 0.67 2003-04 & Sales Tax during investigation 2004-05

Dispute on gross turnover vis-Ã -vis 5.98 2003-04 taxable turnover

West Bengal Disallowance of input tax credit, 289.89 2007 to 2012 Value Added Tax Addition of Turnover

Total 4,150.19

Nature of Forum where dispute is pending Statute

Central Additional Commissioner of Sales Tax, sales Tax Orissa Sales Tax Tribunal, Cuttack

Additional Commissioner of Sales Tax, Sambalpur

The Joint. Commissioner of Sales Tax, Rourkela

Sr. Jt Commissioner, Chowringhee Circle, Kolkata

Central C E S T A T( KOLKATA) Excise and Service Tax

Commissioner, Jt. Commissioner, Addl. Commissioner, Commissioner (Appeal) Bhubaneswar

Dy. Commissioner, Asst. Commissioner, Rourkela

Orissa Entry Addl. Commissioner of Sales Tax, Sambalpur Tax

Additional Commissioner of Sales Tax, The Orissa Sales Tax Tribunal, Cuttack

Orissa Value High Court Of Orissa, Cuttack Added Tax

Orissa Sales Tax Tribunal, Additional Commissioner of Sales Tax, Cuttack

Add. Commissioner of Sales Tax, Sambalpur

Orissa Jt. Commissioner of Sales Tax, Dy. Commissioner, Sales Tax Rourkela

The Orissa Sales Tax Tribunal, Cuttack

West Bengal Sr. Joint Commissioner, Chowringhee circle, Kolkata Value Added Tax

(c) According to the information and explanation given to us there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(viii) The accumulated losses of the company are more than fifty percent of its net worth at the end of the current financial year. The company has incurred cash losses in the current financial year but the company had not incurred cash losses in the immediate preceding financial year.

(ix) Based on the records examined by us and as per the information and explanations given to us, the Company has during the year defaulted in repayment of dues to the banks and financial institutions. However, the Company's proposal for restructuring of credit facilities has been approved by the Corporate Debt Restructuring- Empowered Group and Rs.238.98 lacs were in arrears as on the balance sheet date (refer Note no 5(B) of the financial statement) . There were no outstanding debentures as on the balance sheet date.

(x) According to the information and explanation given to us, the Company has pledged a part of its investments, for the loan taken by its wholly owned subsidiary from bank and financial institutions, the terms and conditions thereof, in our opinion are not prima-facie prejudicial to the interest of the Company. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xii) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Das & Prasad

Chartered Accountants

Firm's Registration No.-303054E

Anil Kumar Agarwal

Place: Kolkata Partner

Dated: 28th August, 2015 Membership No.-062368

Jun 30, 2014

TO THE MEMBERS OF ADHUNIK METALIKS LIMITED Report on the Financial Statements

We have audited the accompanying financial statements of ADHUNIK METALIKS LIMITED ("the Company"), which comprise the Balance Sheet as at 30th June, 2014, the Statement of Profit and Loss and 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 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 Section 211 (3C) of the Companies Act, 1956 (''the Act'') read with the General Circular 15/2013 dated 13th September, 2013 of the 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 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 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 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 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 Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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

1. 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June, 2014;

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

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

Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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 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 opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

(e) On the basis of the written representations received from the directors as on 30th June 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 30th June 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

Annexure to the Independent Auditors'' Report

(Referred to in paragraph 1 under ''Report on Other Legal and

Regulatory Requirements'' section of our report of even date)

(i) In respect of its fixed assets:

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

(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) In respect of its inventory:

(a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) As the Company''s inventory of raw material and finished goods mostly include bulk materials which require technical expertise for establishing the quantity thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above verification by independent expert agencies and according to information and explanation furnished to us, the procedures 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.

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

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to/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)(a) to (g) of the order are not applicable to the Company and hence not commented upon.

(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, 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 weakness or continuing failure

to correct any major weakness in the internal control system of the company in respect of these areas.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rupees five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public within the purview of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 , for the steel products manufactured by the company and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

(ix) (a) Undisputed statutory dues including provident fund,

employee''s state insurance, income tax, sales tax, wealth Tax, service tax, customs duty, excise duty, cess and other material statutory dues have been paid with delays with appropriate authorities. As explained, there is no amount due for deposit with Investor Education & Protection Fund.

(b) According to the information and explanation given to us, no undisputed amount payable in respect of provident fund, employee''s state insurance, investor education and protection fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding, as on the Balance Sheet date for a period of more than six months from the date they become payable.

(c) As at 30th June 2014, the following are the particulars of dues on account of sales tax, customs duty, service tax, excise duty and cess that have not been deposited on account of any dispute:

Name of Nature of Amount Period to Forum where the statute dues (Rs in which the dispute is Lacs) amount pending relates

Disallowance of 179.84 2004-05, Addl. Commissioner Sale against 2005-06 of Sales Tax, Form-C, Form-H & 2007-08 Orissa Sales Tax and transfer of Tribunal, Cuttack stock to branches

Sales tax has 19.35 2012-13 Addl.Commissioner arisen due to of SalesTax, pending ''H'' Sambalpur Forms and for Supporting document Deemed Export. Central Sales Tax On assessment 34.28 2003-04 The Jt Commissioner for 2005-06 & of Sales Tax, shortfall in 2005-06 Rourkela Sales tax has arisen due to pending C Forms, H Forms and F Forms. For 2003 -04 Demand raised on the basis of discrepancies identified during investigation Disallowance 2.30 2009-10 Sr.Jt. Commissioner for sale , Chowringhee against Circle, Kolkata Form-C

Central Excise Dispute towards 2,121.14 2003-09 CESTAT (KOLKATA) and Cenvat Credit service on structural tax steel used for construction of capital goods, input and disallowance of Service Tax on and Service Commission Income Dispute towards 763.42 2006-11 Before Commissioner Cenvat Credit on , Jt. Commissioner, capital goods Addl. Commissioner, & input. Commissioner(Appeal ) Bhubaneswar Dispute# towards 16.20 2005-11 Before Dy. Cenvat Credit on Commissioner, Asst. input. Commissioner, Rourkela

Orissa Entry Tax on 59.92 2002-05 Addl. Commissioner Entry machinery & & of Sales Tax, The Tax spares and 2007-08 Orissa Sales Tax Capital Tribunal, Cuttack Goods

Disallowance of 123.27 2005-07 Hon''ble High Court Input Tax credit. & of Orissa, Cuttack 2006-07

Disallowance of 226.63 2005-06 The Orissa Sales Input Tax credit. & Tax Tribunal, Addl. Orissa 2010-11 Commissioner of Value Sales Tax, Cuttack Added Tax Disallowance of 2.97 2012-13 Addl. Commissioner Input Tax credit. of Sales Tax. Sambalpur

Orissa Demand against 18.68 2003-04 The Jt.Commissioner Sales discrepancies & of Sales Tax, Dy. Tax identified 2004-05 Commissioner, during Rourkela investigation

West Disallowance of 289.89 2007 Sr. Jt.Commissioner Bengal input tax credit, to , Chowringhee Value Addition of 2012 Circle, Kolkata Added Turnover Tax (x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current year and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has generally not defaulted in repayment of dues to banks and financial institutions, however Rs. 3,044.89 lacs was in arrears as on the balance sheet date as mentioned in Note no 5(c) of the financial statements. Further, as informed, there were no outstanding dues to the debenture holders.

(xii) According to Information and explanation given to us and based on the documents and records produced to us, 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 order are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable.

(xv) According to the information and explanation given to us, the Company has pledged a part of its investments, for the loan taken by its wholly owned subsidiary from bank, the terms and conditions thereof, in our opinion are not prima-facie prejudicial to the interest of the Company. According to the information and explanations given to us, the Company has not given any guarantee for loans by others from financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been generally

applied by the Company during the year for the purposes for which they were obtained.

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

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Das & Prasad Chartered Accountants Firm Registration No.-303054E

Sd/- Anil Kumar Agarwal Place: Kolkata Partner Dated: 30th August, 2014 Membership No.-062368

Jun 30, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of ADHUNIK METALIKS LIMITED (''the Company"), which comprise the Balance Sheet as at 30th June, 2013, the Statement of Profit and Loss and 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

2. The Company''s 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 Section 211(3C) of the Companies Act, 1956 (''the Act") and in accordance with the accounting principles generally accepted in India. 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

3. 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.

4. 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 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 Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

6. 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June, 2013;

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

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

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on 30th June, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 30th June, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

(i) In respect of its fixed assets:

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

(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during period.

(ii) In respect of its inventory:

(a) The management has conducted physical verification of inventory at reasonable intervals during the period.

(b) As the Company''s inventory of raw material and finished goods mostly include bulk materials which require technical expertise for establishing the quantity thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above verification by independent expert agencies and according to information and explanation furnished to us, the procedures 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.

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

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause4(iii) (a) to (g) of the order are not applicable to the Company and hence not commented upon.

(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, for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rupees five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public within the purview of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

(viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 , for the steel products manufactured by the company and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

(ix) Undisputed statutory dues including provident fund, employee''s state insurance, income tax, sales tax, wealth Tax, service tax, customs duty, excise duty, cess and other material statutory dues have been paid with delays with appropriate authorities. As explained, there is no amount due for deposit with Investor Education & Protection Fund.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has generally not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

(xii) According to Information and explanation given to us and based on the documents and records produced to us, 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 order are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable.

(xv) According to the information and explanation given to us, the Company has pledged a part of its investments in the earlier years, for the loan taken by its wholly owned subsidiary from bank, are not prima-facie prejudicial to the interest of the company. According to the information and explanations given to us, the Company has not given any guarantee for loans by others from financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been generally applied by the Company during the year for the purposes for which they were obtained.

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

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956

(xix) The Company did not have any outstanding debentures during the period

(xx) The Company has not raised any money through public issue during the year.

(xxi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Das & Prasad

Chartered Accountants

Firm Registration No. 303054E A. K. Agarwal

Place : Kolkata Partner

Dated : 28th August, 2013 Membership No. 062368

Jun 30, 2012

1. We have audited the attached Balance Sheet of Adhunik Metaliks Limited ('the Company') as at 30th June 2012 and also the Statement of Profit and Loss and the cash flow statement for the fifteen months period 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.

2. 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 the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) 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.

4. Further to our comments in the Annexure referred to 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, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account.

iv. In our opinion, the balance sheet, the statement of profit and loss and the 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 the written representations received from the directors, as on 30th June 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Company's Act, 1956.

vi. Attention is drawn to claims receivable of Rs. 2450.00 lacs accounted for by the Company towards supply of inferior quality of raw material by vendors. Pending acceptance of the above claims by the respective vendors, we are unable to opine on the quantification and recoverability of these claims and thus its consequential impact, if any, on the Company's financial statements.

vii. Except for the possible effect of the observation in para (vi) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in ndia;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June 2012;

b) in the case of the Statement of profit and loss, of the loss for the period ended on that date; an

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

(Referred to in our report of even date to the members of Adhunik Metaliks Limited as at and for the fifteen months period ended 30th June, 2012)

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

b) All fixed assets have not been physically verified by the management during the period but there is a regular programme of verification in a phased manner to cover all the items of fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

c) There was no substantial disposal of fixed assets during the period.

ii) a) The management has conducted physical verification of inventory at reasonable intervals during the period.

b) As the Company's inventory of raw materials and finished goods mostly includes bulk materials which require technical expertise for establishing the quantity thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above verification by independent expert agencies and according to the information and explanations furnished to us, the procedures 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.

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification of inventories.

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 clauses 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

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, for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

v) a) According to the information and explanations provided by the management, we are of the opinion that 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 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any deposit from the public within the purview of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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 maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the steel products manufactured by the Company, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

ix) a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been deposited with delays with the appropriate authorities. As explained, there is no amount due for deposit with Investor Education & Protection Fund.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, custom duty, excise duty, cess and other material statutory dues were outstanding, as on the Balance Sheet date for a period of more than six months from the date they became payable except in following cases which have since been paid:

Name of the Nature of dues Amount Period to which statute (Rs.in lacs) the amount relates

Income tax Act, 1961 Corporate dividend tax 8.52 September 2011

Maharashtra Value Value Added Tax and Central 164.60 October and November 2011 Added Tax and Central Sales Tax on sale of goods Sales Tax

c) According to the records of the Company, there are no dues outstanding of income tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute except as mentioned below :

Name of the Nature of dues Amount statute (Rs.in lacs)

Orissa Entry Tax Entry tax on machinery & 63.97 spares & Capital Goods

Central Sales Tax (Orissa) Demand against transfer of stock to 123.40 Rules 57 branches and consignment agents

Central Sales Tax Demand against discrepancies 20.05 identified during investigation

Central Sales Tax Disallowance of sale against Form-C, 839.39 Form-H and transfer of stock to branches

Orissa Value Added Tax Dispute on account of disallowance 140.16 of Input Tax credit

Orissa Sales Tax Dispute on gross turnover vis-a-vis 6.65 taxable turnover

Orissa Sales Tax Demand against discrepancies 12.06 identified during investigation

Central Excise and Dispute towards Cenvat credit on structural 2,175.97 Service Tax steel used for construction of capital goods, input, classification, excise duty on job work, transaction value for stock transfer etc.

Name of the Period to which Forum where dispute Statute the amount relates is pending

Orissa Entry Tax 2002-08 Orissa Sales Tax Tribunal / Additional Commissioner of Sales Tax. Cuttack

Central Sales Tax (Orissa) Rules 57 2003-04 Orissa Sales Tax Tribunal, Cuttack

Central Sales Tax 2003-04 Deputy Commissioner of Sales Tax, Rourkela

Central Sales Tax 2004-12 Orissa Sales Tax Tribunal, Cuttack, Deputy Commissioner of Sales Tax, Rourkela, Additional Commissioner of Sales Tax, Cuttack

Orissa Value Added Tax 2005-07 Orissa Sales Tax Tribunal & High Court, Orissa, Cuttack

Orissa Sales Tax 2003-05 Orissa Sales Tax Tribunal, Cuttack, Deputy Commissioner of Sales Tax, Rourkela

Orissa Sales Tax 2003-04 Deputy Commissioner of Sales Tax, Rourkela

Central Excise and Service Tax 2003-09 CESTAT (Kolkata), Additional Commissioner (Adjudication) Bhubaneswar, Commissioner (Appeal), Bhubaneswar

x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has not defaulted in repayment of dues to banks except for a delay in repayment of dues to the banks to the extent of Rs. 33,154.65 lacs (the delay in such repayment for less than 30 days is Rs. 22,157.25 lacs and for the period between 30 to 90 days is Rs. 10,997.40 lacs in each individual case), of which Rs. 6,960.70 lacs was in arrears as on the balance sheet date. Further, as informed, there were no outstanding dues to the debenture holders and financial institutions.

xii) According to the information and explanations given to us and based on the documents and records produced before us, 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 Order are not applicable.

xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable.

xv) According to the information and explanations given to us, the Company has pledged a part of its investments for loan taken by its wholly owned subsidiary company from bank, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from financial institutions.

xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these loans were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the period to parties or Companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The Company did not have any outstanding debentures during the period.

xx) The Company has not raised any money through a public issue during the period.

xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the period.

For S. R. Batliboi & Co.

Firm registration number: 301003E

Chartered Accountants

per R. K. Agrawal

Place Kolkata Partner

Date : 29th August, 2012 Membership No. 16667

Mar 31, 2011

1. We have audited the attached Balance Sheet of Adhunik Metaliks Limited ('the Company') as at March 31, 2011 and also the Profit and Loss account and 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.

2. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to 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, read with paragraph 5 below;

v. On the basis of the written representations received from the directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

5. Without qualifying our opinion, we draw attention to Note no. 7(b) on Schedule 25 regarding utilisation of Securities Premium Account of Rs.1,289.03 lacs (^3,545.74 lacs) towards meeting the net deferred tax liability arisen during the year, pursuant to the Hon'ble High Court of Calcutta's Order dated March 29, 2010. The above accounting treatment is not in line with the Accounting Standard 22 "Accounting for Taxes on Income" (AS-22) as notified by the Companies (Accounting Standards) Rules 2006 (as amended).

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

b) in the case of Profit and Loss account, of the profit 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 Auditors' Report (Referred to in our report of even date to the members of Adhunik Metaliks Limited as at and for the year ended 31st March, 2011)

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

b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification in a phased manner to cover all the items of fixed assets over a period of three years 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 such verification of fixed assets during the year.

c) There was no substantial disposal of fixed assets during the year.

ii) a) The management has conducted physical verification of inventory at reasonable intervals during the year.

b) The procedures 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.

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

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

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

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, for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

v) a) Based on the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register under section 301, have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits from the public within the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956, and rules framed there under.

vii) In our opinion, the Company's internal audit system is commensurate with the size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the products of the Company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

ix) a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been deposited with delays with the appropriate authorities. As explained, there is no amount due for deposit with Investor Education & Protection Fund.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

c) According to the records of the Company, there are no dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute except as mentioned below :

Name of the Nature of dues Amount Period to which Forum where statute (Rs. in lacs) the amount relates dispute is pending

Orissa Entry Tax Entry tax on machinery & spares & 59.92 2002-08 Orissa Sales Tax Tribunal / Capital Goods Additional Commissioner of Sales Tax. Cuttack

Central Sales Tax Demand against transfer of stock to 123.40 2003-04 Orissa Sales Tax Tribunal, Cuttack (Orissa) Rules 57 branches and consignment agents

Central Sales Tax Demand against discrepancies identified 20.05 2003-04 Deputy Commissioner of Sales during investigation Tax, Rourkela

Central Sales Tax Disallowance of sale against Form-C, 68.97 2004-08 Orissa Sales Tax Tribunal, Cuttack, Form-H and transfer of stock to branches Deputy Commissioner of Sales Tax, Rourkela, Additional Commissioner of Sales Tax, Cuttac

Orissa Value Dispute on account of disallowance 140.16 2005-07 Orissa Sales Tax Tribunal & Added Tax of Input Tax credit High Court,Orissa, Cuttack

Orissa Sales Tax Dispute on gross turnover 6.65 2003-05 Orissa Sales Tax Tribunal, Cuttack, vis-ÃÂ -vis taxable turnover Deputy Commissioner of Sales Tax, Rourkela

Orissa Sales Tax Demand against discrepancies identified 12.06 2003-04 Deputy Commissioner of Sales during investigation Tax, Rourkela

Central Excise and Dispute on Cenvat credit on structural 1,121.60 2003-09 CESTAT (Kolkata), Additional Service Tax steel used for construction of capital Commissioner (Adjudication) goods, input, classification, excise duty Bhubaneswar, Commissioner on job work, transaction value for stock (Appeal), Bhubaneswar transfer, short production booking

* Net of payments made by the Company under protest.

x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has not defaulted in repayment of dues to banks except for a delay of less than 30 days in repayment of dues amounting to Rs. 2,896.90 lacs and that of 30 to 90 days towards repayment oft 4,551.80 lacs. However there was no amount outstanding against such defaults as on the balance sheet date. Further, as informed, there were no outstanding dues to the debenture holders and financial institutions.

xii) According to the information and explanations given to us and based on the documents and records produced to us, 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 Order are not applicable.

xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable.

xv) According to the information and explanations given to us, the Company has pledged a part of its investments / given corporate guarantee for loans taken by two of its subsidiaries from banks, the terms and conditions whereof, in our opinion, are not prima- facie prejudicial to the interest of the Company. Further, the said corporate guarantee has been released by the bank on full repayment of the relevant loans as on 30th March 2011.

xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which these loans were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) The Company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

xix) The Company did not have any outstanding debentures during the year.

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

xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S. R. Batliboi & Co.

Firm registration number: 301003E

CHARTERED ACCOUNTANTS

22 Camac Street

Block 'C, 3rd Floor per R. K. AGRAWAL

Kolkata-700 016. Partner

Date : May 20, 2011 Membership No. 16667

Mar 31, 2010

1. We have audited the attached Balance Sheet of Adhunik Metaliks Limited (the Company) as at March 31, 2010 and also the Profit and Loss account and the Cash Flow statement for the year 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.

2. We conducted our audit in accordance with 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to 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 the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. Without qualifying our opinion, we draw attention to Note no. 8(b) on Schedule 25 regarding utilisation of Securities Premium Account of Rs, 3545.74 lacs towards meeting the net deferred tax liability arisen during the year, pursuant to the Honble High Court of Calcutta Order dated March 29, 2010. The above accounting treatment is not in line with the Accounting Standard 22 ÃAccounting for Taxes on IncomeÃ (AS-22) as notified by the Companies (Accounting Standards) Rules 2006 (as amended).

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

b) in the case of Profit and Loss account, of the profit 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 Auditors Report (Referred to in our report of even date to the members of ADHUNIK METALIKS LIMITED as at and for the year ended 31st March, 2010)

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

b) All fixed assets were physically verified by the management in the previous year in accordance with a planned programme of verifying them once in three years 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 such verification.

c) There was no substantial disposal of fixed assets during the year.

ii) a) The management has conducted physical verification of inventory at reasonable intervals during the year. As regards material lying with outside parties, confirmation certificates have been obtained in most of the cases.

b) The procedures 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.

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii) a) As informed, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clauses 4(iii) (a) to (d) of the Order are not applicable.

b) As informed, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clauses 4(iii) (e) to (g) of the Order are not 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, for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control

system of the company. The Company is not involved in sale of any services.

v) a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register under Section 301, have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits from the public.

vii) In our opinion, the Companys internal audit system is commensurate with the size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

ix) a) Undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty etc. have generally been deposited with delays with the appropriate authorities. As explained, there is no amount due for deposit with Investor Education & Protection Fund.

Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

c) According to the records of the Company, there are no dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute except as mentioned below:

Name of the Nature of dues Amount

statute (Rs,in lacs)

Orissa Entry Tax Entry tax on machinery & spares & 6.88

Capital Goods

Central Sales Tax Demand against transfer of stock to 123.40

(Orissa) Rules 57 branches and consignment agents.

Central Sales Tax Demand against discrepancies identified 20.05

during investigation

Central Sales Tax Disallowance of sale against Form-H 90.53

Orissa Value Added Dispute on account of disallowance of 140.15

Tax Input Tax credit

Orissa Sales Tax Dispute on gross turnover vis-ÃÂ -vis 12.89

taxable turnover

Orissa Sales Tax Demand against discrepancies identified 12.06

during investigation

Central Excise and Dispute on Cenvat credit on input, 1109.51

Service Tax classification, excise duty on job work, transaction value for stock transfer,short production booking Name of the Period to which Forum where statute the amount relates dispute is pending

Orissa Sales Tax 2002-04 Orissa Sales Tax Tribunal, Cuttack

Central Sales Tax 2003-04 Orissa Sales Tax Tribunal, (Orissa) Rules 57 Cuttack

Central Sales Tax 2003-04 Deputy Commissioner of Sales

Tax, Rourkela

Central Sales Tax 2004-07 Orissa Sales Tax Tribunal, Cuttack,

Deputy Commissioner of Sales

Tax, Rourkela

Orissa Value Added 2005-07 Orissa Sales Tax Tribunal & Tax High Court, Orissa, Cuttack

Orissa Sales Tax 2003-05 Orissa Sales Tax Tribunal, Cuttack, Deputy Commissioner of Sales Tax, Rourkela

Orissa Sales Tax 2003-04 Deputy Commissioner of Sales Tax, Rourkela

Central Excise and 2003-05 CESTAT (Kolkata), Additional Service Tax Commissioner (Adjudication) Bhubaneswar, Commissioner (Appeal), Bhubaneswar

x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has not defaulted in repayment of dues to banks and debenture holders except for a delay of less the 30 days in repayment of dues to bank amounting to Rs, 10,389.85 lacs and that of 30 to 90 days in repaymet of dues of Rs, 11,292.16 lacs. However, there was no amount outstanding against such defaults as on the balance sheet date. Further as informed, there are no dues to the financial institution.

xii) According to the information and explanations given to us and based on the documents and records produced to us, 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 Order are not applicable.

xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable.

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) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) The Company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix) The Company in an earlier year had issued fully/ compulsorily convertible unsecured debentures of Rs,10,00 lakhsn which no security or charge was required to be created and the same have been fully converted into equity shares during the year.

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

xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S. R. Batliboi & Co.

Firm registration number: 301003E

Chartered Accountants

22 Camac Street

Block C, 3rd Floor Per R. K. Agrawal

Kolkata-700 016. Partner

Date : May 30, 2010 Membership No. 16667

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