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Auditor Report of Eastcoast Steel Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Eastcoast Steel 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 stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the 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 fair 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 and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 of affairs of the Company as at 31st March, 2015, its loss and its 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, 2015 ("the Order") issued by the Central Government of India in terms of Section 143 of the Act (18 of 2013), we give in the Annexure, a statement on the matters specified in paragraph 3 and 4 of the Order.

2. As required under provisions of 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 the 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 31st March, 2015 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 Rules 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 21 (a) and (b) to the financial statements.

ii) The Company did not have any long term contracts including derivative contracts that require provision under any law or accounting standards for which there were any material foreseeable losses.

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

Annexure referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date

i) In respect of its Fixed Assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

ii) The Company does not have any inventory during the year under audit. Therefore, the provisions of Clause (ii) of paragraph 3 of the Order are not applicable to the Company.

iii) The Company has not granted any loans, secured or unsecured to companies, firm or other parties covered in the register maintained under Section 189 of the Act. Consequently, the requirement of Clause (iii) (a) and Clause (iii) (b) of paragraph 3 of the Order not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the purchases of fixed assets and for the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of section 73 to 76 or any other relevant provisions of the Act and rules framed hereunder. Therefore, provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under sub section (1) of Section 148 of the Act in respect of activities undertaken by the Company.

vii) In respect of Statutory dues :

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-Tax, Sales- Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues have been regularly deposited with 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, 2015 for a period of more than six months from the date of becoming payable.

b) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value added tax, Cess on account of any dispute, which have not been deposited.

c) There were no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company during the year.

viii) The Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current and immediately preceding financial year.

ix) The Company has not borrowed any money by way of loan from Financial Institutions, Banks and Debenture holders; hence there is no question of repayments of dues or default on this account.

x) According to information and explanation given to us the Company has not given guarantee for loans taken by others from Banks or Financial Institutions during the year. Therefore, the provisions of clause (x) of paragraph 3 of the Order are not applicable to the Company.

xi) The Company has not taken any term loan during the year. Therefore, the provisions of clause (xi) of paragraph 3 of the Order are not applicable to the Company.

xii) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.



For Chaturvedi & Shah

Chartered Accountants

Registration No : 101720W

Sd/-

Amit Chaturvedi

Place : Mumbai Partner

Date : 30th May, 2015 Membership No. : 103141


Mar 31, 2014

We have audited the accompanying financial statements of Eastcoast Steel Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair 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 judgement, 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''s internal control. 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 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 :

(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 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.

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 sub-section (3) of section 227 of the Act, we report that:

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

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

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e. On the basis of the written representations received from the directors 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 Act.

Annexure referred to in paragraph 1 under the heading of Report on other legal and regulatory requirements of our Report of even date Re: Eastcoast Steel Limited ("the Company")

1. In respect of its Fixed Assets:

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

(b) Fixed assets have been physically verified by the management in a phased periodical manner as per regular programme of verification, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

(c) There are no substantial disposals of fixed assets during the year.

2. In respect of its Inventory:

The Company does not hold any physical inventories. Thus, provision of clause(ii) of paragraph 4 of the Order is not applicable to the Company.

3. In respect of the loans. secured or unsecured, granted or taken by the Company to / from companies , f irms or other parties covered in the register maintained under section 301 of the Act:

(a) The Company has not given any loan during the year to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of Clauses (iii) (a) to (iii) (e) of paragraph 4 of the Order are not applicable

(b) The Company has taken interest free unsecured loans from two companies covered in the Register maintained under section 301 of the Companies Act, 1956. In respect of the said loan, the maximum amount outstanding at any time during the year is Rs. 29,816,393/- and the year-end balance is Rs. 25,541,393/-.

(c) In our opinion and according to the information and explanation given to us, terms and conditions of the loan taken by the Company are not prima facie prejudicial to the interest of the Company.

(d) The principal amounts are payable over the period of three to five years. In respect of the said loans, there are no overdue amounts.

4. The Company has not carried on any activity during the year. Hence, in our opinion clause (iv) and (v) of the paragraph 4 of the Order is not applicable to the Company.

5. In our opinion and according to the information and explanation given to us the Company has not accepted any deposits from the public within the meaning of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975.

6. The Company does not have a formal internal audit system, Management does not think necessary, establishing an internal audit system in view of suspension of production. However, according to information and explanation given to us, its internal control systems provide reasonable internal checking of its financial transactions.

7. The Company has not carried on any manufacturing operation during the year. Hence the question of cost record required to be maintained under section 209 (1)

(d) of the Companies Act, 1956 does not arise.

8. In respect of statutory dues:

(a) According to the information and explanations given and records produced and examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, professional tax, sales-tax, wealth-tax, service tax, customs duty, cess and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, professional tax, income-tax, wealth-tax, service tax, sales-tax, customs duty, cess and other undisputed statutory dues were outstanding, as at 31st March, 2014 for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us, there are no dues of sales tax, income tax, wealth tax, service tax, custom duty, excise duty and Cess which have not been deposited on account of any dispute.

9. The Company''s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current and immediately preceding financial year.

10. The Company has not borrowed any money by way of loan from Financial Institutions, Banks, Debenture holders; hence there is no question of repayments of dues or default on this account.

11. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

13. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause (xiv) of paragraph 4 of the Order are not applicable to the Company.

14. According to information and explanation given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions. Therefore, the provisions of Clause (xv) of paragraph 4 of the Order are not applicable to the Company.

15. The Company has not taken any term loan during the year. Therefore, the provisions of clause (xvi) of paragraph 4 of the Order are not applicable to the Company.

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

17. The Company has not made any preferential allotment of shares to parties and companies covered under Register maintained under section 301 of the Act.

18. The Company did not have any outstanding debenture during the year.

19. The Company has not raised any monies by way of public issue during the year.

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

For Chaturvedi & Shah Firm Registration No. 101720W Chartered Accountants

Sd/- Amit Chaturvedi Place : Mumbai Partner Date : 12th May, 2014 Membership No.: 103141


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Eastcoast Steel Limited ("the Company"),which comprise the Balance Sheet as at March 31,2013, and Statement of Profit and 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"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair 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 judgement, 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 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:

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

31,2013; (ii) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(Mi) in the case of the 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, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE

Re : Eastcoast Steel Limited("the Company")

1. In respect Of Fixed Assets:

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

(b) The fixed assets were physically verified by the management during the year. No material discrepancies were noticed during such verification.

(c) The Company has not disposed off significant amount of fixed assets during the year and therefore do not affect the going concern status of the Company.

2. In respect of Inventory :

The Company does not hold any physical inventories. Thus provision of clause (ii) of paragraph 4 of the Order is not applicable to the Company.

3. In respect of the loans, secured or unsecured, granted or taken by 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 given any loan during the year to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirement of clause (iii) (b) (c) and clause (iii) (d) of the paragraph ,4 of the Order are not applicable.

(b) The Company has taken unsecured loan from a Company covered in the register maintained under section 301 of the Companies Act, 1956. In respect of the said loan, the maximum amount outstanding at any time during the year is Rs. 2,55,41,393/- and the year-end balance is Rs. 2,25,41,393/-.

(c) In our opinion and according to information and explanation given to us, the rate of interest and other terms and conditions of the loan taken by the Company, are not prima facie prejudicial to the interest of the Company.

(d) The principal amounts are payable over the period of three to five years, where the interest is payable annually at the discretion of the company, However company has able to obtain waiver of interest for current and previous financial year.

4. The Company has not carried on any activities during the year. Hence in our opinion clause (iv) and (v) of the paragraph 4 of the Order are not applicable to the Company.

5. In our opinion and according to information and explanation given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975.

6. The Company does not have a formal internal audit system, Management does not think necessary, establishing an internal audit system in view of suspension of production. However, according to information and explanation given to us, its internal control systems provide reasonable internal checking of its financial transactions.

7. The Company has not carried on any manufacturing operation during the year. Hence the question of cost record required to be maintained under section 209 (1) (d) of Companies Act, 1956 does not arise.

8. In case of Statutory dues:

(a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales tax, customs duty, and other statutory dues applicable to it. 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, 2013 for a period o* more than six months from the date they became payable.

(p) According to the information and explanations given to us, there are no statutory dues outstanding on account of disputes.

9. The accumulated loss of the Company at close of the year is more than fifty percent of its net worth. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

1Q). The Company has not borrowed any money by way of loan from financial Institutions, bonks and debenture holders; hence there is no question of repayments of dues or default ort this account. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

t2„ In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

T3. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause (xiv) of paragraph 4 of the Order are not applicable to the Company.

14. According to infoonation and explanation given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions. Therefore, the provisions of clause (xv) ot paragraph 4 of the Order are not applicable to the Company.

15. The Company has not taken any term loans during the year Therefore, the provision of clause (xvi) of paragraph 4 of the order are not applicable to the Company.

16. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, the funds raised on short-term basis have not been used for long-term investment.

17. The Company has not made any preferential allotment of shares to any party listed in the register maintained under Section 301 of the Companies Act, 1956.

1 8. The Company has not issued any secured debentures during the year covered by our audit.

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

20. According to information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year. For Chaturvedi and Shah

Firm Registration No. 101720W

Chartered Accountants Sd/-

Amit Chaturvedi

Place: Mumbal Partner

Date: 8thAugust2013 Membership No.103141


Mar 31, 2011

1. We have audited the attached Balance Sheet of EASTCOAST STEEL LIMITED ("the Company") as at 31st March 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 prepared are free of material misstatements. 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 (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, 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 & explanations, which to the best of our knowledge & 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 the books;

(c) The Balance Sheet, Profit & Loss Account and the Cash flow 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 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 written representation received from the directors as on 31st March 2011, and taken on the record by the board of directors ,we report that none of the directors are disqualified as at 31st March 2011 from being appointed as a director u/ s 274 (1) (g) 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 significant accounting policies and notes thereof required by the Companies 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 2011; and

ii. In the case of Profit & Loss Account, of the Loss for the year ended on that date.

iii. In the case of Cash flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT RE : EASTCOAST STEEL LIMITED REFERRED IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE

1. In respect of Fixed Assets:

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

(b) The fixed assets were physically verified by the management during the year. No material discrepancies were noticed during such verification.

(c) The Company has not disposed off significant amount of fixed assets during the year and therefore do not affect the going concern status of the company.

2. In respect of Inventory :

The Company does not hold any Physical Inventories. Thus provision of clause 4(ii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

3. In Respect of the loans secured or unsecured, granted or taken by 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 given any loan during the year to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirement of clause (iii)(b) (c)and clause (iii) (d) of the paragraph 4 of the order are not applicable.

(b) The Company has taken unsecured loan from a Company covered in the register maintained under section 301 of the Companies Act, 1956. In respect of the said loan, the maximum amount outstanding at any time during the year is Rs. 1,90,49,908/ - and the year-end balance is Rs. 1,90,49,908/-.

(c) In our opinion and according to information and explanation given to us, the rate of interest and other terms and conditions of the loan taken by the company, are not prima facie prejudicial to the interest of the company.

(d) The principal amounts are payable on demand and there is no repayment schedule. The interest is payable on demand.

(e) In respect of the said loan, the same are repayable on demand and therefore the question of overdue amount does not arise.

4. The Company has not carried on any activities during the year. Hence in our opinion clause (iv) and (v) of the Companies (Auditor Report) Order, 2003 not applicable to the company.

5. In our opinion and according to information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit)Rules,1975.

6. The Company does not have a formal internal audit system, commensurate with size of the Company and nature of its business, management does not think necessary, establishing an internal audit system in view of suspension of production. However, according to information and explanation given to us, its internal control systems provide reasonable internal checking of its financial transactions.

7. The company has not carried on any manufacturing operation during the year. Hence the question of cost record required to be maintained under section 209 (1) (d) of Companies Act, 1956 does not arise.

8. In case of Statutory dues:

(a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales tax, customs duty and other statutory dues applicable to it. 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 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues outstanding on account of disputes.

9. The accumulated loss of the company at close of the year is more than 50% of its net worth. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

10. The Company has not borrowed any money by way of loan from financial Institutions, banks and debenture holders. Hence there is no question of repayments of dues or default on this account.

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

12. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the Order are not applicable to the Company.

13. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause (xiv) of the Order are not applicable to the Company.

14. According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Therefore, the provisions of clause (xv) of the Order are not applicable to the Company.

15. The company has not taken any term loans during the year .Hence clause (xvi) of the order are not applicable to the company.

16. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, the funds raised on short-term basis have not been used for long-term investment.

17. The Company has not made any preferential allotment of shares to any party listed in the register maintained under Section 301 of the Companies Act, 1956.

18. The Company has not issued any secured debentures during the year covered by our audit.

19. The company has not raised any money by way of public issue during the year.

20. According to information and explanation given to us ,no fraud on or by the company has been noticed or reported during the year.

For Chaturvedi and Shah Firm Registration No. 101720W Chartered Accountants

Sd/- Amit Chaturvedi Partner Membership No.103141

Place : Mumbai Date : 12th August, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of EASTCOAST STEEL LIMITED as at 31st March, 2010, 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 management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with auditing standards generally accepted in India. Those statements 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.

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 1 above :-

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 maintained by the Company so far as it appears from our examination of such books.

c. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet, the Profit & Loss A/c and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211 (3c) of the Companies Act, 1956.

e. On the basis of written representation received from the Directors as on March 31,2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31,2010 from being appointed as a director u/ s 274 (1) (g) of the Companies Act, 1956.

f. In our opinion and to the best of our information and 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 Balance Sheet of the state of affairs of the company as at 31st March 2010 and

ii. in the case of Profit and Loss Account of the Loss for the year ended as on that date; and

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

ANNEXURE TO AUDITORS REPORT RE : EASTCOAST STEEL LIMITED. PONDICHERRY REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE

1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. All the 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 the nature of its assets. No serious discrepancies were noticed on such verification. None of the Fixed Assets were disposed off during the year and therefore do not affect the going concern status of the company.

2. The company has no stock of raw materials or finished goods during the year. Further it has not carried out any manufacturing activity nor procured any materials during the year under review. Therefore, we have no observation in respect of its inventory.

3. In our opinion, the terms and conditions on which loans have been taken from the parties listed in the register maintained under Section 301 of the Companies Act, 1956, are prima facie not prejudicial to the interests of the Company. The company has taken loan from one party and the balance amount due as on the close of the year is Rs. 136.35 Lakhs. The company has not advanced amounts to any party listed in the register maintained under Section 301 of the Companies Act, 1956.

4. The company has not carried on any activities during the year. Hence in our opinion clauses 4 (iv) and (v) regarding adequate internal control system and particulars of contracts or arrangements are not applicable to the company.

5. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposit within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

7. The Company has not carried on any manufacturing operations during the year. Hence the question of cost records required to be maintained Under Section 209 (1) (d) of the Companies Act, 1956 does not arise.

8. (a) According to the information and explanations given to us, Provident Fund dues and

Employees state Insurance dues have been regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, there are no arrears of undisputed statutory dues including Income Tax, Sales tax, Customs Duty, Provident Fund and Employees State Insurance outstanding as on 31st March, 2010 for a period of more than six months from the date they became payable.

(c) Dues not deposited on account of disputes - Nil

9. On the basis of the audited financial statements, the accumulated loss of the company at the close of the year is more than 50% of its net worth. Further, it has incurred cash loss during the year (previous year cash loss Rs. 62.58 Lacs).

10. Since the company has not borrowed any money by way of secured loans, there are no repayment of dues or default on this account.

11. The company has not issued any debentures nor does it have any secured loans.

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

13. The company is not a Chit fund, Nidhi, Mutual benefit fund or a Society. Accordingly, clause 4 (xiii) of the Order is not applicable.

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4 (xiv) of the Order is not applicable.

15. On the basis of information and explanations given to us, the company has not given guarantee to any Bank or other financial institutions on behalf of other parties.

16. The company has not taken any term loans during the year. Hence clause 4 (xvi) is not applicable to the company.

17. In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements, the funds raised on short term basis have not been used for long term investment.

18. The company has not made any preferential allotment of shares to any party listed in the register maintained under Section 301 of the Companies Act, 1956.

19. The company has not issued debentures. Hence, clause 4 (xix) of the Order is not applicable to the company.

20. The company has not raised any money by way of public issues during the year.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For KRISHNAN & GIRI

Chartered Accountants Firm Registration No: 1512S

R. SAPTAGIRI

Place : Chennai Partner

Date : 29,th July 2010 Membership No: 38623

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