Auditor Report of Amforge Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s Amforge Industries Limited ("the Company"),which comprise the Balance Sheet as at 31st March 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 Financial Statements

The Company''s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards andmatters 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 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 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 accounting policies used and the reasonableness of the accounting estimates made by 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 financial statements.

Opinion

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, of the state affairs of the Company as at 31st March 2015, and its Profit and its Cash Flows for the year ended on that date.

Emphasis of Matters

We draw attention Note 21(4) to the financial statements which, describes overdue business advance given to a Company amounting to Rs. 21,658/- thousand.

Report on other Legal and Regulatory Requirements

(I) As required by the Company (Auditor''s Report) Order 2015 issued by the Central Government of India of sub-section (11) of section 143 of the Act (hereinafter referred to as the Order), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(II) 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 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 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 written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the other matters included in the Auditor''s Report and to our 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 refer note 21(1) to the financialstatements.

(ii) The Company did not have any long-term contracts including derivatives 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.

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

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

(b) The fixed assets are physically verified by the management during the financial year, which, in our opinion is reasonable having regard to size of the Company and the nature of its assets and no material discrepancies have been noticed on such verification.

2. The nature of business of the Company does not require it to have any inventory. Hence, the requirement of clause (ii) of paragraph 3of the said Order is not applicable to the Company.

3. 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.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has been noticed or reported.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act,2013 and the rules made there under as notified.

6. As informed to us, the Central Government has not prescribed maintenance of cost records under sub-section (1) of Section 148 of the Act.

7 (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees ''State Insurance, Income-tax, Sales tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable with the appropriate authorities in India. There were no arrears outstanding as at the last day of the financial year for a period of more than six months from the date of they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of duty of Excise, duty of Customs, Sales tax include value added tax, and Income tax as at 31st March 2015 which have not been deposited on account of a dispute, are as follows;

Name of the Nature of Period to Forum where statute dues which the dispute is amount pending relates

Central Excise Excise Duty F.Y. 2003-04 CESTAT Mumbai Act, 1944 Asst./ Addl./ Joint Commissioner of Central Excise

Central Sales Sales Tax F.Y.2005-06 Commissioner of Tax Act Appeals (Sales Tax)

Central Sales Sales Tax F.Y. 2005-06 Joint Commissioner Tax Act of Sales Tax

Income Tax Income Tax F.Y. 2006-07 Commissioner Act,1961 of Income Tax

Income Tax Income Tax F.Y. 2004-05 Income Tax Act,1961 Appellate Tribunal (ITAT)

Name of the Amtount statute in Rs. 000

Central Excise 46,524/- Act, 1944



Central Sales 2,057/- Tax Act

Central Sales 11,175/- Tax Act

Income Tax 5,367/- Act,1961

Income Tax 10,102/- Act,1961

According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth tax and service tax which have not been deposited on account of any dispute.

(c) There were no amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 2013.

8. The Company has accumulated losses more than fifty percent of its net worth as at the end of the financial year and it has not incurred any cash losses during the current financial year ended on that date and in the immediately preceding financial year.

9. According to the records of the Company examined by us and as per the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders as at the balance sheet date.

10. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank sand financial institution.

11. In our opinion, and according to the information and explanations given to us, the Company has not raised any term loans during the year.

12. During the course of our examination of the books and records of the Company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For J.Singh & Associates Chartered Accountants (Firm Reg. No. 110266W)

CA.S.P.Dixit (Partner) M. No. 041179.

Place:Mumbai Dated: May,2015

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Mar 31, 2014

We have audited the accompanying financial statements of AMFORGE INDUSTRIES LIMITED (''the Company'') which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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

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 disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of Matter

We draw attention to the Note 21(i) in regarding Significant Accounting Policies of the Company, wherein it is stated that the Company''s financial statements have been prepared on going concern basis.

It is pertinent to note that

(i) The accumulated losses as at 31st March, 2014 are Rs. 4,21,913.58 thousands, which is more than 50% of the net worth of the Company.

(ii) The Company has however, continued trading activities during the year.

Our opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

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

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet , Statement of Profit and Loss and 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 subsection (3C) of section 211 of the Companies Act, 1956; and

e. on the basis of written representations received from the directors as on 31st March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in paragraph 3 of our report to the members of Amforge Industries Limited (''the Company'') for the year ended 31st March 2014.

We report that

1 In respect of its fixed assets:

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

(b) As explained to us ,the fixed assets have been physically verified by the management at regular intervals in accordance with a phased programmed of verification adopted by the Company, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets had been carried out at the year end. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) In our opinion, the Company has not disposed off any fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

(a) According to the information and explanations given to us, there are no inventories at the year end date, hence there is no question of physical verification.

(b) The procedure of physical verification of inventory followed by the management was reasonable and adequate in relation to the size of the company and the nature of its business during the year.

(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 such verification.

3. According to the information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956;

(a) The Company has not granted any loans to companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956.

(b) The Company has taken inter corporate deposits in the nature of unsecured loans aggregating to Rs. 40,900 thousand from a company and a firm covered in the Register maintained under section 301 of the Companies Act, 1956.

(c) The rate of interest and other terms and conditions on which such loans have been taken by the Company are "at arm''s length basis "and prima facie, not prejudicial to the interest of the Company.

(d) However, there is no stipulation as to repayment of principal and interest but are however repayable on demand.

4. In our opinion and according to the information and explanations given to us, there are 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.

5. In respect of transactions entered in the Register maintained under section 301 of the Companies Act, 1956:

(a) In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section ; and

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements have been made at prices which are prima facie reasonable having regards to the prevailing market prices at the relevant time

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently the provisions of section 58 A, 58 AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under and the directives issued by the Reserve Bank of India are not applicable.

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

8. In our opinion and according to the information and explanations given to us, the Company is not required to maintain cost records pursuant to rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 during the year.

9. In respect of statutory dues:

(a) According to the records of the Company, it has been regular in depositing undisputed statutory dues including investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and other statutory dues with the appropriate authorities during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

(b) The disputed statutory dues aggregating to Rs. 87293 thousand that have not been deposited on account of matters pending before appropriate authorities are as under:

S. Name of the Nature of the Forum where dispute Amount No statute dues is pending Rs. 000s

1 Central Excise Excise Duty CESTAT Mumbai 46,524 Act, 1944 Asst./Addl./Joint Commissioner of Central Excise.

2 Customs Act Customs Duty CESTAT Mumbai 12,068 3 Sales Tax Act Sale Tax Commissioner of 2,057 Appeals (Sales Tax)

4 Sales Tax Act Sale Tax Joint Commissioner of Sales Tax 11,175

5 Income Tax Act, Income Tax Commissioner of 5,367 1961 Income Tax (Appeals)

6 Income Tax Act, Income Tax Income Tax Appellate 10102 1961 Tribunal (ITAT)

Total 87,293

10. The Company has accumulated losses more than fifty percent of its net worth as at the end of the financial year and the Company has incurred cash losses during the current financial year, as well as in the immediately preceding financial year.

11. Based on our audit procedure and on the basis of the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company does not have any borrowings by way of debentures.

12. According to the information and explanation given to us, we are of the opinion that the company has maintained adequate records where the company has granted loans and advances on the basis of security by way of pledge of shares.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, clause 4(xiii) of the Companies (Auditors'' Report) Order 2003 is not applicable to the Company.

14. The Company is not dealing in securities. However, in respect of its investments the Company has maintained proper records of the transactions and contracts as well as timely entries have been made therein. These investments have been held by the Company in its own name.

15. 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.

16. On the basis of the records examined by us, we have to state that, the Company has not taken any term loans during the year.

17. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall examination of the Balance Sheet of the Company, we are of the opinion that, funds raised on short term basis have prima facie not been used for long term investment.

18. The Company has not made any preferential allotment of shares during the year.

19. No debentures have been issued by the Company during the year.

20. The Company has not raised any money by way of public issue during the year.

21. During the course of examination of books and records of the Company carried out in accordance with the generally accepted auditing practices and according to the information and explanations given to us, no fraud on or by the Company , noticed or reported during the year nor have we been informed of such case by the Management.

For BANSAL & ASSOCIATES Chartered Accountants Firm Registration No. 100985W S.K. BANSAL (Proprietor) M.No.12288

Place: Mumbai Date: 29th May, 2014.

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Mar 31, 2012

1. We have audited the attached Balance Sheet of AMFORGE INDUSTRIES LIMITED as at 31st March, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date both annexed thereto together referred to us financial statements. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial.

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 any 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 and amended by (Amendment) Order, 2004 issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our Audit;

(b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

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

(d) In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956;

(e) On the basis of the written representations received from the directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(f) Attention is invited to the following:

(1) Note no. 1(2) regarding the discontinuation of the manufacturing operations at its Chinchwad Plant and selling of the substantial assets at such plant.

(2) Note no. 6, regarding the assignment of the debt payable to one of the Company against the amount receivable from the Company.

(g) Attention is also invited to Note No. 1(I), significant accounting policies of the Company, wherein it is stated that the company's financial statements have been prepared on "going concern" basis. It is pertinent to note that

i) The accumulated losses as at 31.3.2012 are Rs. 4,11,638.88 thousands, which is more then 50% of the net worth of the Company.

ii) Company has sold of its entire assets lying at its only manufacturing plant at Chinchwad during the year.

iii) The Company has however, continued trading activities pursuant to disposal of its assets at such plant.

(h) In our opinion and to the best of our information and according to the explanations given to us, in view of the opinion given by us vide para (f) and (g)above, the said accounts read together with the notes thereon 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

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

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

Annexure To The Auditors' Report

Referred to in paragraph 3 of our report of even date

1 In respect of its fixed assets:

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

(b) As explained to us, the fixed assets have been physically verified by the management at regular intervals in accordance with a phased programme of verification adopted by the Company, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets had been carried out at the year end. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The Company has disposed of entire fixed assets at its Chinchwad plant during the year and its going concern concept had been adversely affected.

2. In respect of its inventories:

(a) According to the information and explanations given to us, there are no inventories at the year end date, hence there is no question of physical verification.

(b) The procedure of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business during the year.

(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 such verification.

3. According to the information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956;

(a) The Company has not granted any loans to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has taken inter corporate deposits in the nature of unsecured loans aggregating to Rs. 32100 thousand from three companies and a firm and a director covered in the register maintained under section 301 of the Companies Act, 1956.

(c) The rate of interest and other terms and conditions on which such loans have been taken by the Company are "at arms length basis" and prima facie, not prejudicial to the interest of the Company.

(d) However, there are no stipulation as to repayment of principal and interest but are repayable on demand.

4. In our opinion and according to the information and explanations given to us, there are 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.

5. In respect of transactions entered in the register maintained under section 301 of the Companies Act, 1956:

(a) In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section ; and

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are prima facie reasonable having regards to the prevailing market prices at the relevant time

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently the provisions of section 58 A, 58 AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under and the directives issued by the Reserve Bank of India are not applicable.

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

8. In our opinion and according to the information and explanations given to us, the Company is not required to maintain cost records pursuant to rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 during the year.

9. In respect of statutory dues:

(a) According to the records of the Company, it has been regular in depositing undisputed statutory dues including investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and other statutory dues except wealth tax, tax collected at source aggregating to Rs. 50.90 thousands with the appropriate au- thorities during the year.

According to the information and explanations given to us, no undisputed amounts pay- able in respect of aforesaid dues except wealth tax, tax collected at source aggregating to Rs. 50.90 thousands were outstanding as at 31st March, 2012 for a period of more than six months from the date of becoming payable.

(b) The disputed statutory dues aggregating to Rs. 78151 thousands that have not been de- posited on account of matters pending before appropriate authorities are as under:

Sr Name of the statute Nature Forum where dispute is Amount No. of the pending Rs.'000s

1 Central Excise Act, Excise CESTAT Mumbai Asst 48557 1944 Duty ./Addl./Jt.Commissioner of Central Excise.

2 Customs Act Customs CESTAT Mumbai 12068 Duty

3 Sales Tax Act Sale Tax Commissioner of 2057 Appeals (Sales Tax)

4 Income Tax Act, 1961 Income Tax Commissioner of 15469 Income Tax (Appeals)

Total 78151

10. The Company has accumulated losses more than fifty percent of its net worth as at the end of the financial year and the Company has not incurred cash losses during the current financial year, however, there were cash losses in the immediately preceding financial year.

11. Based on our audit procedure and on the basis of the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company does not have any borrowings by way of debentures.

12. According to the information and explanation given to us, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies ( Auditors' Report) Order 2003 is not applicable to the Company.

14. The Company is not dealing in securities. However, in respect of its investments the Company has maintained proper records of the transactions and contracts as well as timely entries have been made therein. These investments have been held by the Company in its own name.

15. 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.

16. On the basis of the records examined by us, we have to state that, the Company has not taken any term loans during the year.

17. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall examination of the financial statements of the Company, we are of the opinion that, funds raised on short term basis have prima facie not been used during the year for long term investment.

18. The Company has not made any preferential allotment of shares during the year.

19. No debentures have been issued by the Company during the year.

20. The Company has not raised any money by way of public issue during the year.

21. During the course of examination of books and records of the Company carried out in accordance with the generally accepted auditing practices and according to the information and explanations given to us, no fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the Management.





For BANSAL AND ASSOCIATES Chartered Accountants (Firm Registration No. 100985W)

S.K. Bansal Proprietor. M.No.012288.

MUMBAI : 29th May, 2012

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Mar 31, 2010

1. We have audited the attached Balance Sheet of AMFORGE INDUSTRIES LIMITED as at 31st March, 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

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 any 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 (Auditors Report) Order, 2003 and amended by (Amendment ) Order . 2004 issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, subject to that:

The financial statements of the company have been prepared and finalized on the basis of available records and documents with the company .Due to suspension of operations at the plant since December 2008 and the subsequent lockout and labour problems since May 2009 the relevant supportings.evidences and records were not produced for verification during the course of our audit.

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 and subject to the Para No.3 as above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our Audit;

(b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

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

(d) 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;

(e) On the basis of the written representations received from the Directors, as on 31s March, 2010, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as On 31st March ,2010 from being appointed as a Director in terms of clause ( g ) of sub-section ( 1 ) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

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

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

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph 3 of our report of even date

1 In respect of its fixed assets:

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

(b) As explained to us ,the fixed assets have been physically verified by the management at regular intervals in accordance with a phased programme of verification adopted by the Company, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets except in respect of its Chinchwad plant due to lock out According to the information and explanations given to us , no material discrepancies were noticed on such verification however the same have been adjusted in the books of account.

(c) The Company has disposed off some of the fixed assets during the year which does not form any substantial part of its fixed assets so as to affect its going concern.

2. In respect of its inventories:

(a) According to the information and explanations given to us.due to lockout at the plant management were unable to conduct the physical verification of inventories.

(b) In absence of any physical verification during the year, the procedure for such verification could not be commented upon.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper , records of its inventories however in absence of any physical verification , discrepancies could not be noticed.

3. According to the information and explanations given to us, in respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956;

(a) The Company has not granted any loans to companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956.

(b) The Company has taken inter corporate deposits in the nature of unsecured loans aggregating to Rs. 124.30 Lacs from two companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(c) The rate of interest and other terms and conditions on which loans have been taken by the Company are not prima facie, prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are reasonable internal control system which needs to be further strengthen commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sate of goods and services.

5. In respect of transactions entered in the Register maintained under section 301 of the Companies Act, 1956:

(a) In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section ; and

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made are of special nature for which market prices could not be verified. As explained to us, the same are prima facie reasonable at relevant times.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently the provisions of section 58 A, 58 AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under and the directives issued by the Reserve Bank of India are not applicable.

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

8. As no production activity carried out during the year by the company trie maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 are not applicable to the Company.

9. In respect of statutory dues:

(a) According to the records of the Company , it has been regular in depositing undisputed statutory dues including investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and other statutory dues except Provident fund , Employees State Insurance and profession tax aggregating to Rs. 10.46 lacs in respect of its plant under lock out with the appropriate authorities during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues except Provident fund, Employees State Insurance and profession tax aggregating to Rs. 10.46 lacs were outstanding as at 31st March, 2010 for a period of more than six months from the date of becoming payable.

(b) The disputed statutory dues aggregating to Rs. 860.69 lacs that have not been deposited on account of matters pending before appropriate authorities are as under:

Sr. Name of the statute Nature of Forum where dispute is pending Amount

No the dues Rs. 000s

1 Central Excise Act, 1944 Excise Duty CESTAT MumbaiAsst./ Addl./

Jt. Commissioner of Central Excise. 48557

2 Customs Act Customs Duty CESTAT Mumbai 12068

3 Sales Tax Act Sale Tax Commissioner of Appeals (Sales Tax) 3193

4 Income Tax Act, 1961 Income Tax Commissioner of Income Tax (Appeals) 22251

Total 86069

10. The Company has accumulated losses more than fifty percent of its net worth as at the end of the financial year and the Company has incurred cash losses during the current and in the immediately preceding financial year.

11. Based on our audit procedure and on the basis of the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company does not have any borrowings by way of debentures.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, clause 4(xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

14. The Company is not dealing in securities. However, in respect of its investments the Company has maintained proper records of the transactions and contracts as well as timely entries have been made therein. These investments have been held by the Company in its own name.

15. 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.

16. On the basis of the records examined by us , we have to state that, the Company has not taken any term loans during the year.

17. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall examination of the financial statements of the Company , we are of the opinion that, funds raised on short term basis have prima facie not been used during the year for long term investment.

18. The Company has not made any preferential allotment of shares during the year.

19. No debentures have been issued by the Company during the year.

20. The Company has not raised any money by way of public issue during the year.

21. During the course of examination of books and records of the Company carried out in accordance with the generally accepted auditing practices and according to the information and explanations given to us, no fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the Management.

For BANSAL AND ASSOCIATES

Chartered Accountants

(Firm Registration No. 100985W)

S.K.Bansal

MUMBAI: 2nd September, 2010. Proprietor.

M.No.012288