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Auditor Report of DCW Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of DCW 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 the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. 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.

3. 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

4. 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 thereunder. 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.

5. 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 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.

6. 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.

Opinion

7. 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 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

8. We draw attention to Note 38 to the financial statements which describes the uncertainty related to the outcome of the petitions/appeals filed by the company in the matter of retrospective legislation and electricity tax demand of Rs.3568.70 lacs on captive power generated during the period 2003-2012 and in the matter of customs duty demand of Rs.2961.65 lacs on coal imported by the company during 2011 and 2012 respectively and hence have not been provided. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

9. 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 said Order, to the extent applicable.

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

f) 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 - Refer Notes 30 and 38 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 - Refer Note 35(c) to the financial statements;

iii) there have been no delays in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

i. (a) The company has maintained proper records showing particulars including quantitative details and situation of Fixed Assets.

(b) We are informed that the fixed assets have been physically verified by the Management with the assistance of external agencies during the year. In our opinion the frequency of verification is reasonable. As per the information given to us by the management, no material discrepancies as compared to book records were noticed in respect of the fixed assets verified during the year.

ii. (a) The inventories of finished goods (except goods lying with consignees and in transit), stores, spare parts and raw materials (except

coal stock lying with outside party and stocks in transit) have been physically verified by the management with the help of external agencies. In our opinion, the frequency of physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion, the company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

iii. According to the information and explanations given to us, the company has not granted any loans to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanation that for purchase of certain raw materials, stores, components, and fixed assets, alternative sources of supply are limited with reference to quality, delivery schedules, credit period and some of the items purchased are of special nature, and hence comparable alternative quotations are not available for these, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause (v) of the para 4 of the Order are not applicable to the company.

vi. The Central Government has prescribed maintenance of cost records under section 148(1) of the Companies Act, 2013 in respect of certain products manufactured in the company. We have broadly reviewed the records maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1)) of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

vii. (a) According to the records of the company, the company is generally regular in depositing undisputed statutory dues payable

including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues with appropriate authorities.

According to the information and explanations given to us, no undisputed amounts in respect of the aforesaid statutory dues were in arrears, as at 31st March, 2015, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the company, the dues of sales tax / income tax / customs duty / wealth tax / service tax / excise duty /value added tax/ cess, which have not been deposited on account of any dispute are as follows:-

Name of the Statute / Period Nature of Dues Supreme High Court Court

Customs Act, 1962 (Custom 1997 to - - Duty Including Penalty & 2015 Interest, wherever applicable)

Central Excise Act, 1944 1997 to - 82.50 (Excise Duty Including 2015 Penalty & Interest, wherever applicable)

Sales Tax legislations 1982 to - 3.57 (sales tax, including penalty & 2015 interest wherever applicable)

Service Tax 2005 to - - 2015

Local cess, local cess 1989 to - 275.45 surcharge [land revenue 2015 including penalty and interest wherever applicable]

GRAND TOTAL - 361.52

Name of the Statute / Forum where dispute is pending Nature of Dues Appel- Appellate late Tribunal Authority

Customs Act, 1962 4581.56 - (Custom Duty Including Penalty & Interest, wherever applicable)

Central Excise Act, 1944 384.76 90.54 (Excise Duty Including Penalty & Interest, wherever applicable)

Sales Tax legislations 534.90 959.32 (sales tax, including penalty & interest wherever applicable)

Service Tax - 39.17

Local cess, local cess surcharge - - land revenue including penalty and interest wherever applicable

GRAND TOTAL 5501.22 1089.03



Name of the Statute / State Gove- Grand Nature of Dues rnment Total

Customs Act, 1962 (Custom Duty Including Penalty & Interest, wherever applicable) - 4581.56

Central Excise Act, 1944 (Excise Duty Including Penalty & Interest, wherever applicable) - 557.80



Sales Tax legislations 1696.71 3194.50 (sales tax, including penalty & interest wherever applicable)

Service Tax - 39.17

Local cess, local cess surcharge 12.49 287.94 land revenue including penalty and interest wherever applicable]

GRAND TOTAL 1709.20 8660.97

Appellate Tribunal includes STAT, CESTAT & ITAT

** Appellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals

(c) According to the information and explanation given to us, the amount required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act 1956 and rules made thereunder have been transferred by the Company to the fund within time.

viii. The company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

ix. On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Banks/Financial Institutions. The company has not raised any monies against issue of debentures.

x. 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 institution.

xi. In our opinion, the term loans taken during the year have, prima facie, been applied for the purpose for which they were raised.

xii. 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 to us by the management, no material fraud on or by the company has been noticed or reported during the course of our audit.

For V. SANKAR AIYAR & CO. Chartered Accountants (Firm Registration No.109208W)

Place: Mumbai Date: 23rd May, 2015

(S. Venkatraman) Partner

Membership No.34319


Mar 31, 2014

We have audited the accompanying financial statements of DCW LIMITED (the Company) 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

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"). The 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 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 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 entity. 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:

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

b) in the case of the Statement of Profit and Loss, 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.

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, 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 the annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

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

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

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

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

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

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

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

(b) We are informed that the fixed assets have been physically verified by the Management with the assistance of external agencies during the year. In our opinion the frequency of verification is reasonable. As per the information given to us by the management, no material discrepancies as compared to book records were noticed in respect of the fixed assets verified during the year.

(c) Since there is no disposal of a substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii. (a) The inventories of finished goods (except goods lying with consignees and in transit), stores, spare parts and raw materials (except coal stock lying with outside party and stocks in transit) have been physically verified by the management with the help of external agencies. In our opinion, the frequency of physical verification is reasonable.

(b) In our opinion, the procedures in respect of Inventories physically verified are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion, the company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification as compared to the record of inventories.

iii. (a) Based on the audit procedures applied by us and 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 listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) Based on audit procedures applied by us and according to the information and explanations given to us, the company has taken interest free unsecured loans from directors and interest bearing unsecured loan from a company listed in the register maintained under Section 301 of the Companies Act, 1956 aggregating to Rs. 9,20,00,000. The maximum amount involved during the year was Rs. 9,20,00,000 and there were no closing balance in the year end from such parties.

(c) The rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interests of the company.

(d) The principal amount and interest on such loans have been fully paid during the year.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanation that for purchase of certain raw materials, stores, components, and fixed assets, alternative sources of supply are limited with reference to quality, delivery schedules, credit period and some of the items purchased are of special nature, and hence comparable alternative quotations are not available for these, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. (a) Based on the audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that Section.

(b) Sub clause (b) of sub-para (v) of para 4 of the Order is not applicable as there are no such transactions exceeding the value of Rupees Five Lacs in respect of any party in the financial year.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause (vi) of the para 4 of the Order are not applicable to the company.

vii. The Company has, in general, an internal audit system commensurate with the size and nature of the Company''s business.

viii. The Central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of certain products manufactured in the company. 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. We have not, however, made a detailed examination of these records with a view to determine whether they are accurate or complete.

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, service tax, custom duty, excise duty, cess and other material statutory dues that are required to be deposited regularly with authorities, have generally been regularly deposited with the appropriate authorities.

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

(b) According to the information and explanations given to us and the records of the company, the dues of sales tax / income tax / customs duty / wealth tax / service tax / excise duty / cess, which have not been deposited on account of any dispute are as follows:-

(Amount in Rs. lacs)

Name of the Statute / Period Nature of Dues

Customs Act, 1962 (Custom 1997 to Duty Including Penalty & 2014 Interest, wherever applicable)

Central Excise Act, 1944 1997 to (Excise Duty Including Penalty 2014 & Interest, wherever applicable)

Sales Tax legislations (sales tax, 1982 to including penalty & interest 2014 wherever applicable)

Service Tax 2005 to 2014

Electricity Tax 2003 to 2014

Local cess, local cess surcharge 1989 to (land revenue including 2014 penalty and interest wherever applicable)

GRAND TOTAL

From where dispute is pending Name of the Supreme High Appel- Appellate State Grand Statute Court Court late Tri- Authority** Governt- Total bunal* ment

Customs Act, 1962 (Custom - 32.56 127.05 161.57 - 321.18 Duty Including Penalty & Interest, wherever applicable)

Central Excise 0.24 128.50 157.06 160.05 - 445.85 Act, 1944 (Excise Duty including Penalty & Interest, Wherever applicable

Sales Tax legislations - 3.57 2,334.21 1,664.27 - 4,002.05 (sales tax including penalty & interest whereever applicable

Service Tax - - - 39.17 - 39.17

Electricity 2,511.24 - - - - 2,511.24

Local Cess, local - - - - 12.49 12.49 cess sur- charge (land revenue including penalty and interest Wherever applicable

GRAND TOTAL 2,511.48 164.63 2,618.32 2,025.06 12.49 7,331.98

* Appellate Tribunal includes STAT, CESTAT & ITAT

** Appellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals

x. The company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions / Banks or Debenture holders.

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

xiii. The Company is not a chit fund or a niche or a mutual benefit society. Therefore the provisions of sub para (xiii) of para 4 of the Order are not applicable to the Company.

xiv. In respect of shares, securities and other investments dealt in or traded by the Company, proper records have been maintained of the transactions

and contracts and timely entries have been made therein. All the investments are held by the Company in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

xv. According to the information and explanations given to us, the Company has not given any guarantee for any loans taken by others from any bank or financial institution.

xvi. In our opinion, the term loans taken during the year have, prima facie, been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us, based on an overall examination of the balance sheet of the Company, related information made available to us and as represented to us by the Management, funds raised on short term basis of Rs. 6,911.25 lacs, have been used during the year for long term purposes.

xviii. The Company has not made preferential allotment of shares during the year to the promoters and a promoter group company covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures during the year and therefore the question of creating security or charge in respect thereof does not arise.

xx. The Company has not made any public issue of any securities during the year and therefore the question of disclosing the end-use of money raised by any public issue does not arise.

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 to us by the management, no fraud on or by the company has been noticed or reported during the course of our audit.

For V. Sankar Aiyar & Co.

Chartered Accountants.

FRN 109208W

Place: Mumbai

Dated: 19th May, 2014 [ S. Venkatraman ]

Partner

Membership No. 34319


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of DCW LIMITED (the company) which comprise the Balance Sheet as at 31st March 2013 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

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"). The 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 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 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2013

b) in the case of the Statement of Profit and Loss, 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.

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, 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 the annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

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

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

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

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

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub–section (3C) of section 211 of the Companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31st March 2013 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2013 from being appointed as a director in terms of clause (g) of sub– section (1) of section 274 of the Companies Act, 1956.

i. (a) The Company has maintained proper records showing p art i c ulars in cl ud in g quantitative details and situation of fixed assets.

(b) We are informed that the fixed assets have been physically verified by the Management with the assistance of external agencies during the year. In our opinion the frequency of verification is reasonable. As per the information given to us by the management, no material discrepancies as compared to book records were noticed in respect of the fixed assets verified during the year.

(c) Since there is no disposal of a substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii. (a) The inventories of finished goods (except goods lying with consignees and in transit), stores, spare parts and raw materials (except coal stock lying with outside party and stocks in transit) have been physically verified by the management with the help of external agencies. In our opinion, the frequency of physical verification is reasonable.

(b) In our opinion, the procedures in respect of Inventories physically verified are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion, the company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification as compared to the record of inventories.

iii. Based on the audit procedures applied by us and according to the information and explanations given to us; the company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

iv In our opinion and according to the information and explanations given to us, having regard to the explanation that for purchase of certain raw materials, stores, components, and fixed assets, alternative sources of supply are limited with reference to quality, delivery schedules, credit period and some of the items purchased are of special nature, and hence comparable alternative quotations are not available for these, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. (a) Based on the audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that Section.

(b) Sub clause (b) of sub–para (v) of para 4 of the Order is not applicable as there are no such transactions exceeding the value of Rupees Five Lacs in respect of any party in the financial year.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause (vi) of the para 4 of the Order are not applicable to the company.

vii. The Company has, in general, an internal audit system commensurate with the size and nature of the Company''s business.

viii. The Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of certain products manufactured in the company. 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. We have not, however, made a detailed examination of these records with a view to determine whether they are accurate or complete.

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, service tax, custom duty, excise duty, cess and other material statutory dues that are required to be deposited regularly with authorities, have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts in respect of the aforesaid statutory dues were in arrears, as at 31st March, 2013, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the company, the dues of sales tax / income tax / customs duty / wealth tax / service tax / excise duty / cess, which have not been deposited on account of any dispute are as follows:–

(Amount in Rs. lacs)

Name of the Statute / Period Nature of Dues Supreme High Court Court

Customs Act, 1962 (Custom 1997 to 32.56 Duty Including Penalty & 2013 Interest, wherever applicable)

Central Excise Act, 1944 1997 to 0.24 85.48 (Excise Duty Including 2013 Penalty & Interest, wherever applicable)

Sales Tax legislations (sales tax, 1982 to 2.57 including penalty & interest 2013 wherever applicable)

Service Tax Local cess, local cess 1989 to surcharge (land revenue 2013 including penalty and interest wherever applicable)

GRAND TOTAL 0.24 120.61

Name Appel- Appellate State Grand late Tri- Authority** Governt- Total bunal* ment

Customs Act, 1962 127.05 159.61

Customs Act, 1962 157.20 5.80 248.72

Customs Act, 1962 207.10 1,981.26 2,190.93

Customs Act, 1962 39.17 39.17

Customs Act, 1962 12.49 12.49

Customs Act, 1962 491.35 2,026.23 12.49 2,650.92

*Appellate Tribunal includes STAT, CESTAT & ITAT

**Appellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals.

x. The company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions / Banks or Debenture holders.

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

xiii. The Company is not a chit fund or a niche or a mutual benefit society. Therefore the provisions of sub para (xiii) of para 4 of the Order are not applicable to the Company.

xiv. In respect of shares, securities and other investments dealt in or traded by the Company, proper records have been maintained of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

xv. According to the information and explanations given to us, the Company has not given any guarantee for any loans taken by others from any bank or financial institution.

xvi. In our opinion, the term loans taken during the year have, prima facie, been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us, based on an overall examination of the balance sheet of the Company, related information made available to us and as represented to us by the Management, funds raised on short term basis of Rs. 1,146.92 lacs, have been used during the year for long term purposes.

xviii. The Company has made preferential allotment of

shares during the year to the promoters and a promoter group company covered in the register maintained under section 301 of the Companies Act, 1956 and the price at which the shares have been issued is not prejudicial to the interest of the company.

xix. The Company has not issued any debentures during the year and therefore the question of creating security or charge in respect thereof does not arise.

xx. The Company has not made any public issue of any securities during the year and therefore the question of disclosing the end–use of money raised by any public issue does not arise.

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 to us by the management, no fraud on or by the company has been noticed or reported during the course of our audit.

For V. Sankar Aiyar & Co., Chartered Accountants.

Firm Reg. No. 109208W

[ S. Venkatraman ]

Place: Mumbai Partner

Dated: 14th May, 2013 Membership No. 34319


Mar 31, 2010

1. We have audited the attached Balance Sheet of DCW Limited as at 31st March 2010 and also the Profit and Loss Account and Cash Flow Statement of the Company 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 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 and read together with the Companies (Auditors Report) Amendment Order, 2004 (hereinafter referred to as the Order) 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 in paragraph 3 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 Companys 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, to the extent applicable, except as indicated in Note B14 of Schedule N to the Accounts regarding interest capitalization of Rs. 78.8 5 lacs on carbonators and inclusion of power turnover and profit related thereto as part of Caustic Soda segment which is not in accordance with the Accounting Standard 17 on "Segment Reporting"

(v) On the basis of written representations received from the Directors as on 31st 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;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our observation in para 4(iv) above which has consequential impact of Rs. 78.85 lacs on profits of the year and reserves and read with the Significant Accounting Policies and other 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:

(a) In the 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 and Loss Account, of the profit for the year ended on that date, and

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

Annexure referred to in paragraph 3 of Auditors Report to the Shareholders of DCW Limited on the Accounts for the year ended 31st March, 2010

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

(b) We are informed that the fixed assets have been physically verified by the Management with the assistance of external agencies during the year. In our opinion the frequency of verification is reasonable. As per the information given to us by the management, no material discrepancies as compared to book records were noticed in respect of fixed assets verified during the year.

(c) Since there is no disposal of a substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii. (a) The inventories of finished goods (except goods lying with consignees and in transit), stores, spare parts and raw materials (except salt at Sahupuram, coal with outside party and stocks in transit) have been physically verified by the management with the help of external agencies. In our opinion, the frequency of physical verification is reasonable.

ib) In our opinion, the procedures in respect of Inventories physically verified are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion, the company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification as compared to the record of inventories.

iii. based on the audit procedures applied by us and according to the information and explanations given to us; the company has not granted/ taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanation that tor purchase of certain raw materials, stores, components, and fixed assets, alternative sources of supply are limited with reference to quality, delivery schedules, credit period and some of the items purchased are of special nature, and hence comparable alternative quotations are not available for these, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and tor the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. (a) Based on the audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements referred to in Section .301 of the Companies Act, 1950, have been entered in the register required to be maintained under that Section.

(b) Sub clause (b) of sub-para (v) of para 4 of the Order is not applicable as there are no such transactions exceeding the value of Rupees Five lacs in respect of any party in the financial year.

vi. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of the Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the rules framed thereunder, with regard to deposits accepted from the public.

We are informed by the Management that no order has been passed by the Company law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal under Sections 58A and 58AA of the Companies Act, 1956.

vii. The Company has, in general, an internal audit system commensurate with the size and nature of the Companys 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 ltd) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of these records with a view to determine whether they are accurate or complete.

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, service tax, custom duty, excise duty, cess and other material statutory dues that are required to be deposited regularly with authorities, have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of the aforesaid statutory dues were in arrears, as at 51st March, 2010, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records or the company, the dues or sales tax / income tax / customs duty , wealth tax / service tax excise duty / cess, which have not been deposited on account of any dispute are as follows:-

Name of the Statute / Period

Nature of Dues

Customs Act, 1962 (Custom Duty 1997 to 2010

Including Penalty & Interest, wherever applicablel

Central Excise Act, 1944 (Excise Duty 1997 to 2010

Including Penalty & Interest, wherever applicablel

Sales Tax legislations (sales tax, 1982 to 2010

including penalty & interest wherever applicable)

Local cess, local cess surcharge II and 1989 to 2010

revenue including penalty and interest wherever applicable!

Income Tax Act, 1961 2004-2005 to

2006-2007

GRAND TOTAL

Name of the Statute/ Forum where Dispute is pending

Nature of Dues High Appellate Appellate Commis- State Grand

Court Tribunal* Authority** sionerate Govern- Total

ment

Caustoms Act, 1962 Custom Duty 32.55 12 7.05 - - - 159.61 Including Penalty & Interest, Wherever applicanle



Central Excise Act, 1944 (Excise Duty 128.50 148.69 35.78 - - 512.97 Including Penalty & Interest, Wherever applicanle

Sales Tax legislations (sales tax, 2.57 415.68 458.08 418.89 - 1295.22 Including Penalty & Interest, Wherever applicanle

Lacal cess, local cess surching IIand - - - - 12.69 12.69 revenue including penalty and interest Wherever applicanle

Income Tax Act, 1961 - - 110.85 - - 110.85 GRAND TOTAL 163.63 691.42 604.71 418.89 12.69 1891.34

* Appellate Tribunal includes STAT, CESTAT & ITAT

** Appellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals

x. The company does not have any accumulated losses at the end of the financial year. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions / Banks or Debenture holders.

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

xiii. The Company is not a chit fund or a niche or a mutual benefit society. Therefore the provisions of sub para (xiii) of para 4 of the Order are not applicable to the Company.

xiv. In respect of shares, securities and other investments dealt in or traded by the Company, proper records have been maintained of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

xv. According to the information and explanations given to us, the Company has not given any guarantee for any loans taken by others from any bank or financial institution.

xvi. In our opinion, the term loans taken during the year have, prima facie, been applied tor the purpose for which they were raised.

xvii. According to the information and explanations given to us, based on an overall examination of the balance sheet of the Company, related information made available to us and as represented to us by the Management, funds raised on short term basis, prima facie, have not been used during the year for long term investment.

xviii. The Company has not made any 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 has not issued any debentures during the year and therefore the question of creating security or charge in respect thereof does not arise.

xx. The Company has not made any public issue of any securities during the year and therefore the question of disclosing the end-use of money raised by any public issue does not arise.

xxi. We are informed that during the year, no instances of material fraud on or by the company have been noted or reported by the management.

For V. Sankar Aiyar & Co.,

Chartered Accountants

Place : Murnbai S. Venkatraman

Dated : 14th May, 2010 Partner

Membership No. 34319 Firm Reg No. 109208W



 
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