Auditor Report of BWL Ltd.

Mar 31, 2014

We have audited the accompanying Financial Statements of BWL Limited which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit & Loss and 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

2. Management is responsible for the preparation of these financial Statements that give a true a fair view of the financial position, financial performance and Cash Flow 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 fair presentation of the Financial Statements that are free from material misstatement, whether due to fraud or error.

3. 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 of 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 judgments, 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 statement.

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

4. Our report in terms of requirement of the companies (Auditor''s Report) order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of section 227 of the Companies Act, 1956 in annexed hereto,

5. Basis of Qualified Opinion Attention is invited to the followings.

a) Accounts of the company have been compiled on the basis of going concern concept notwithstanding negative net worth, years of suspension of production in factory and reference of the company to BIFR for which we are unable to comment on extent of adjustments that may be necessitated against assets and liabilities of the company if company ceases to continue as a going concern following adverse predicament.

b) Whole time directors remuneration has been approved by a remuneration committee where all three members are not non executive directors as required under clause - 2 (ii), Annexure 1D of LA - 49 and Companies Act, 1956

c) Treatment of gratuity and leave salary are not inconformity with AS- 15 (Revised), impact there of is not readily ascertainable.

6. 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 matters qualified in 5 (a) & 5 (c) above impact where of are not readily quantifiable, 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:

a) in case of the Balance Sheet of the State of affairs of the company as at 31st March, 2014.

b) in the case of Statement of Profit & Loss, of the Loss of the company for the year ended on that date.

c) in the case of Cash Flow Statement, Flows for the year ended on that date.

7. Report on Other Legal and Regulatory Requirements

1. As required by the companies (Auditor''s Report) order, 2003 ("the order ") 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 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 and proper Returns adequate for the purpose of our audit have been received from branches not visited by us.

c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts and with the Returns received from branches not visited by us.

d) Except for the unascertainable effect of the matters described in para 5(a) and 5(c) of the basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement comply with the accounting standards referred to in sub section (3C) of section 211 of the Act.

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

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said Section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Referred to in Paragraph 3 of our report of even date

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

(b) Tangible Fixed assets have been physically verified by the management during the year which, in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancy was noticed on such verification.

c) No substantial part of tangible fixed assets have been disposed of during the year.

(ii) (a) The Inventories have been physically verified by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of Inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) In our opinion and according to the information and explanations given to us, the company has not granted any loan, secured or unsecured during the year to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has taken unsecured loans (initially bearing interest at a rate of 5% P.A. and rendered interest free by lenders w.e.f. 01.04.2008) aggregating Rs.668.79 lacs excluding interest accrued thereon from six parties and four companies all covered in the register maintained under section 301 of the Companies Act. Terms & Conditions of such loans are not prima-facie prejudicial to the interest of the company. Maximum due in aggregate during the year was Rs.669.76 lacs exclusive of interest outstanding for Rs.34.71 lacs. These Loans are not ordinarily repayable except when authorized by BIFR.

(iv) 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 inventory, fixed assets and also for the sale of goods & Services. During the course of our audit, we have not observed any major weaknesses in the internal controls system.

(v) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that transaction need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there have been no transactions of sale, purchase or services in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

(vi) The company has not accepted any deposit from public during the year.

As stated to us no order has been passed against the company by C.L.B or National Company Law Tribunal or RBI or any Court or any other Tribunals.

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

(viii) Maintenance of cost records under Section 209(1)(d) of the Company''s Act, 1956 has not been prescribed by Central Government.

(ix) (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales tax, Wealth tax, Customs Duty, Excise Duty, Service Tax, Cess and other statutory dues to the extent applicable to the company, have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanation given to us, details of dues of ESI, Sales Tax, Excise Duty and Customs Duties which have not been deposited on account of any dispute are given below:

Particulars Forum where Amount Dispute is pending (Rs.)

Sales Tax High Court 1, 73,01,956/-

Board of Revenue 4, 47,80,231/-

Addl. Commissioner 62,45,423/-

Deputy Commissioner 1,06,326/-

Excise Duty High Court 8,73,013/-

Customs Duty Commissioner 2,46,756/-

Appellate Tribunal 3,33,963/-

ESI High Court 1, 32,42,753/-

(x) The accumulated loss at the end of the financial year is more than 50% of net worth. The company has incurred cash loss during the year covered by our report. It has sustained cash loss in preceding financial year.

(xi) There are no dues to Banks and Financial Institutions. The company has no debenture holder.

(xii) In our opinion and according to the information and explanation 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.

(xiii) The provision of any special statute applicable to chit fund/nidhi/mutual benefit fund is not applicable to the company.

(xiv) In our opinion and according to the information and explanation given to us the company has not given guarantees for loans taken by others from banks or financial institutions.

(xv) In our opinion and according to the information and explanations given to us the company does not have any term loan.

(xvi) The company has not raised any short term fund during the year, which has been utitlised for long term investment.

(xvii) According to the information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

(xviii) During the year covered by our audit report, the company has not raised any money by way of public issue.

(xix) No fraud on or by the company has been noticed or reported during the course of our audit.

(xx) Other paragraphs of the order are not applicable to the company.

For G. Basu & Co. Chartered Accountants R. No. : 301174E

Place : Kolkata (N. K. Ghosh) Date : 28th May,2014 Partner (M.No. 053094)

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Mar 31, 2010

1) We have audited the attached Balance Sheet of BWL Limited as at 31st March, 2010 and its annexed Profit & Loss account and Cash Flow Statement for the year ended on that date. 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 man- agement, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) Our report in terms of requirement of the companies (Auditors Report) order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of section 227 of the Companies Act, 1956 in annexed hereto,

i

4) Attention is invited to the followings :-

a) Compilation of accounts of the company on the basis of going concern concept notwith- standing negative net worth and reference of the company to BIFR (Note No. B (6) of Sched- ule P) with our consequent inability to express any opinion on the impact on assets, liabilities and networth in case the company ceases to continue as agoing concern following adverse predicament.

b) Treatment of Gratuity & Leave salary are not in confirmity of AS-15 (revised) (Para A(g), Schedule -P).

c) Impact of above observations are not readily ascertainable.

5) Subject to our comments in the foregoing paragraph, we report that:

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

ii) In our opinion proper books of accounthave been kept as required by law as far as appears from our examination of the books and the above-mentioned accounts are in agreement therewith.

iii) In our opinion, the mandatory provisions of Accounting Standards referred to under section 211 (3c) of companies Act 1956 have been complied with by the company except for treat- ment of gratuity & leave salary already reported above.

iv) On the basis of written representations obtained from the directors, we report that none of the Directors of the company is disqualified for the office of the director within the meaning of Section 274 (1)(g) of Companys Act 1956.

v) 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 man- ner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) in case of the Balance Sheet of the State of affairs of the company as at 31st March, 2010;

b) in the case of the Profit & Loss Account, of the profit of the company fbr the year ended on that date.

c) in the case of Cash Flow Statement, Flows for the year ended on that date.

ANNEXURE OF AUDITORS REPORT Referred to in Paragraph 3 of our report of even date

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

(b) Fixed assets have been physically verified by the management during the year which in our opinion is reasonable having to the size of the company and nature of its assets. No material discrepancy was noticed on such verification.

(c) As per our earlier report OFC Division has already lost its going concern status. Sales of Fixed Assets of Steel Wire Division during the year were not significant enough to affect the going concern identity of relevant division.

(ii) (a) The Inventories have been physically verified by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of Inventories. The discrepancies noticed on verification be- tween the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(Hi) (a) In our opinion and according to the information and explanations given to us, the company has not granted any loans, secured or unsecured during the year to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has taken unsecured loans (initialy bearing interest at a rate of 5% PA. which has been waived by lenders w.e.f.01.04.2008) aggregating Rs.618.27 lacs with- out any stipulation of repayment of principal and the date of payment of interest from seven Parties and four companies all covered in the register maintained under section 301 of the Companies Act. Terms & Conditions of such loans are not primafacie prejudicial to the interest of the company. Since payment of principal loan and interest has so far not been demanded, there does not appear to have any default in repayment/payment of loan/ interest. Maximum due Rs.698.36 lacs was at year end exclusive of interest outstainding Rs.34.91 lacs. ;

(iv) In our opinion and according to the information and explanations given to us, there are ad- equate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods & Ser- vices. During the course of our audit, we have not observed any major weaknesses in the internal controls system.

(v) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that transaction need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, transactions in pursuance of contracts or arrangements entered in the register maintained under Sec- tion 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices of the relevant time;

(vi) The company has not accepted any deposit from public during the year.

As stated to us no order has been passed against the company by C.L.B or National Company Law Tribunal or RBI or any Court or any other Tribunals.

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

(viii) The Central Government has prescribed maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 in respect of discontinued Optical Fibre Cable Division of the company which could not be verified by us. Besides, the unit is under closure. Maintenance of relevant records has not been prescribed for Steel Wire Division by Central Government.

(ix) (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales tax, Wealth tax, Customs Duty, Excise Duty, Service Tax, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2010 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanation given to us, details of dues of Sales Tax, Excise Duty and Customs Duties which have not been deposited on account of any dis- pute are given below :-

Particulars Forum where the Amount dispute is pending (Rs.)

Sales Tax High Court 43,52.645/-

Board of Revenue 3,67,82.593/-

Addl. Commissioner 1,42,36,177/-

Asst. Commissioner 1,29,63,421/-

Excise Duty High Court 8,73,013/-

Appellate Tribunal 67,992/-

Customs Duty Commissioner 2,46,756/-

Appellate Tribunate 3,33,963/-

(x) The accumulated loss at the end of the financial year is more then 50% of Companies Networth. The company has incurred cash loss during the year covered by our report. It has not sus- tained any cash loss in preceding financial period.

(xi) There is no dues to Banks and Financial Institutions. The company has no debenture holder.

(xii) In our opinion and according to the information and explanation 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.

(xiii) The provision of any special statute applicable to chit fund/nidhi/mutual benefit fund are not applicable to the company.

(xiv) In our opinion and according to the information and explanation given to us the company has not given guarantees for loans taken by others from banks or financial institutions.

(xv) In our opinion and according to the information and explanations given to us the company has not raised any new term loans during the year.

(xvi) Subject to our inability to assess the nature of loan obtained from promoters sources whether for short or long term usage for want of repayment stipulations thereon, the company has not raised any other short term fund during the year, which has been utitlised for long term invest- ment.

(xvii) According to the information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

(xviii) During the year covered by our audit report, the company has not raised any money by way of public issue.

(xix) No fraud on or by the company has been noticed or reported during the course of our audit.

(xx) Other paragraphs of the order are not applicable to the company.

For G. Basu & Co. Chartered Accountants

R. No. : 301174E

Place : Bhilai (J. N. Dhar) Dated : 28th August, 2010 Partner (M.No. 007117)