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Auditor Report of Ferro Alloys Corporation Ltd.

Mar 31, 2016

TO THE MEMBERS OF FERRO ALLOYS CORPORATION LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Ferro Alloys Corporation Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2016 the Statement of Profit and Loss, the Cash Flow Statement for the year ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10)of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 and 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, 2016 (“the Order”) issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the Annexure ''A'', a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. 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, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With reference to the adequacy of internal financial controls over financial reporting of the Company and the operating effectiveness of such control, refer our separate report in Annexure- ‘B''.

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us.

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements;

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

iii. there was no amount required to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our report to the members of Ferro Alloys Corporation Limited (‘the Company''), on the Standalone Financial Statements for the year ended 31st March, 2016.

We report that:

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The title deeds of immovable properties are held in the name of the Company.

ii) Physical verification of inventory has been conducted at reasonable intervals by the Management. No material discrepancies were noticed on physical verification.

iii) The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013.

iv) In our opinion and according to information and explanations given to us, the Company has not given any loan, made any investment, given any guarantee, or provided any security covered under section 185 and 186 of the Act during the year.

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

vi) The Central Government has specified maintenance of cost records under sub-section 1 of Section 148 of the Act and are of the opinion that prima facie such accounts and records have been made and maintained.

vii) (a) According to the information and explanations given to us, the Company is regular in depositing undisputed statutory

dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, the following dues of Sales tax, entry tax, duty of customs and duty of excise have not been deposited by the Company on account of disputes:-

Nature of dues

Rs, /Lacs

FORUM WHERE THE DISPUTE IS PENDING

PERIOD

CUSTOMS DUTY

10.16

Dy. Commissioner of Customs, Paradip

1990-91 & 2000-01

1.13

Customs Excise & Service Tax Appellate Tribunal, Kolkata

1999-2000 & 2000-01

137.84

Asst. Commissioner Central Excise, Customs & Service Tax, Balasore.

1981-82, 1982-83, 1985-86, 1988-89, 1989-90, 1990-91, 1996-97, 1997-98, 1999-2000,2000-01,2001-02

81.94

Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar

1997-98 to 2001-02

64.96

Commissioner of Customs (Appeals), Kolkata

1983-84

61.18

Hon’ble High Court, Odisha

1995-96 & 1997-98

8.15

Jt. Secretary (Review) MOF, GOI, CBEC, Delhi

1994-95

EXCISE DUTY

2.20

Asst. Commissioner Central Excise, Customs & Service Tax, Balasore

1981

22.88

Central Excise and Service Tax Appellate Tribunal, West Zone Bench, Mumbai

2001-02 & 2002-03

1190.47

Customs Excise & Service Tax Appellate Tribunal, Kolkata

2007-08 & 2008-09

83.58

Commissioner (Appeal) Central Excise Customs & Service Tax, Bhubaneswar

2005-06, 2007-08, 2008-09 & 2009-10

46.02

Addl. Commsr., Central Excise Customs & Service Tax, Bhubaneswar-II

2011-12, 2012-13 & 2013-14

2540.60

Commissioner Central Excise Customs & Service Tax, Bhubaneswar-II

2009-10, 2010-11, 2011-12 & 2012-13

SALES TAX

25.08

Additional Commissioner Sales Tax, Cuttack

1980-81,1981-82, 2005-06 & 2006-07

10.69

Sales Tax Tribunal, Cuttack

2000-01 & 2003-04

9.49

Addl. Commissioner of Sales Tax, Cuttack

2005-06, 2006-07, 2007-08

832.78

Commissioner of Sales Tax, Central Zone, Cuttack

2007-08

527.75

Joint Commissioner Commercial Taxes, Balasore

1999-2000, 2005-06, 2006-07, 2007-08

79.87

Joint Commissioner Commercial Taxes, Bhubaneswar

2012-13 & 2013-14

ENTRY TAX

231.83

Additional Commissioner of Sales Tax, Central Zone, Cuttack

2007-08

viii) The Company has not defaulted in repayment of loan or borrowing to financial institutions, banks, government or dues to debenture holders.

ix) The Company has not raised money by way of initial public offer or further public offer (including debt instrument) or term loan during the year.

x) Based upon the audit procedure performed and information and explanations given by the management, we report that no fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year.

xi) The Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provision of section 197 read with Schedule V to the Act.

xii) To the best of our knowledge and according to the information and explanations given to us, the Company is not a Nidhi Company.

xiii) To the best of our knowledge and according to the information and explanations given to us, the transactions with the related parties are in compliance with section 177 and 188 of the Act, where applicable, and the details of such transactions have been disclosed in the financial statements, as required by the applicable accounting standards.

xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv) To the best of our knowledge and according to the information and explanations given to us, the Company has not entered into non-cash transaction with directors or persons connected with them.

xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Report on the Internal Financial controls under clause (I) of Sub-section 3 of Section 143 of the Companies Act, 2013

We have audited the internal financial controls over financial reporting of Ferro Alloys CorporationLimited (“the Company”) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company‘s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016, based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For SALVE & Co.

Chartered Accountants

(Firm''s Registration No.109003W)

C.A. K.P. SAHASRABUDHE

Place: Noida, UP Partner

Date :27th May, 2016 (Membership No.007021)


Mar 31, 2015

We have audited the accompanying standalone financial statements of Ferro Alloys Corporation Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015 the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policiesand other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its profit 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 (11) of the Act, we give in the Annexure, a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. 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 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 Rule11 the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the informations and explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements;

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

iii. there has been no delay in transferring amounts, required to be transferred, to the investor education and protection fund by the Company during the year ended March 31,2015.

The Annexure referred to in our report to the members of Ferro Alloys Corporation Limited ('the Company'), for the year ended 31st March, 2015.

We report that :

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies werenoticed on such verification.

ii) a) Physical verification of inventory has been conducted at reasonable intervals by the Management.

b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relationto the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed by the Management on physicalverification.

iii) The Company has not granted unsecured loans to parties covered in the Register maintained under Section 189 of the Companies Act, 2013 ('the Act').

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

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

vi) Wehave broadly reviewed the cost records maintained by the Company pursuant to the Rules speciefied by the Central Government under sub-section 1 of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) (a) According to the information and explanations given to us, the Company is regular in depositing the 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 with the appropriate authorities.

(b) The dues in respect of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess not deposited on account of any dispute amounts to Rs. 6241.98 lacs and the same are pending before appropriate authorities as under:-

Nature of dues Rs. /Lacs FORUM WHERE THE DISPUTE IS PENDING

CUSTOMS DUTY 10.16 Dy. Commissioner of Customs, Paradip

1.13 Customs Excise & Service Tax Appellate Tribunal, Kolkata

137.84 Asst. Commissioner, Central Excise, Customs & Service Tax, Balasore

81.94 Commissioner of Central Excise, Customs and Service Tax, Bhubaneswar

64.96 Commissioner of Customs (Appeals), Kolkata

61.18 Hon'ble High Court, Odisha

8.15 Jt. Secretary (Review) MOF, GOI, CBEC, Delhi

EXCISE DUTY 2.20 Asst. Commissioner, Central Excise, Customs & Service Tax, Balasore

22.88 Central Excise & Service Tax Appellate Tribunal, West Zone Bench, Mumbai

1190.47 Customs Excise and Service Tax Appellate Tribunal, Kolkata

79.38 Commissioner (Appeal) Central Excise, Customs & Service Tax, Bhubaneswar

46.02 Jt. Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-1

1911.43 Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-II

SALES TAX 25.08 Additional Commissioner, Sales Tax, Balasore

10.69 Sales Tax Tribunal, Cuttack

1191.61 Additional Commissioner of Sales Tax, Cuttack

832.78 Commssionr of Sales Tax, Central Zone, Cuttack

0.45 Asst. Commissioner, Commercial Taxes, Balasore

ROYALTY 24.48 Dy. Director Mines, J.K. Road (Odisha)

38.82 Hon'ble High Court, Odisha

ENTRY TAX 231.83 Additional Commissioner of Sales Tax, Central Zone, Cuttack

INTEREST 251.86 Hon'ble High Court, Odisha

DEMAND 16.64 Dy. Director Mines, J.K. Road (Odisha)

GRAND TOTAL 6,241.98

Nature of Dues PERIOD

CUSTOMS DUTY 1990-91 & 2000-01

1999- 2000 & 2000-01

1981-82, 1982-83, 1985-86, 1988-89, 1989-90, 1990-91,1996-97, 1997-98, 1999-00, 2000-01 & 2001-02

1997-98 to 2001-02 1983-84

1995-96, 1997-98

1994-95

EXCISE DUTY 1981

2001- 02 & 2002-03

2007- 08 & 2008-09

2005-06, 2007-08, 2008-09 & 2009-10

2011-12, 2012-13 & 2013-14

2009-10, 2010-11,2011-12 & 2012-13

SALES TAX 1980-81, 1981-82, 2005-06 & 2006-07

2000- 01 & 2003-04

1988-89, 1999-00, 2001-02, 2005-06, 2006-07, 2007-08, 2008- 09, 2009-10, 2010-11 & 2011-12

2007-08

1999-2000

ROYALTY 2002- 03, 2003-04, 2008-09 & 2009-10

2009- 10 & 2010-11

ENTRY TAX 2007-08

INTEREST 2007- 08

DEMAND 2008- 09 & 2009-10

(c) The amount required to be transferred to investor education and protection fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

(viii) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to financial institution or bank or debenture-holders.

(x) The Company has not given any guarantee for loans taken by others from bank or financial institution, the terms and conditions whereof are prejudicial to the interest of the Company.

(xi) The term loans raised by the Company have been applied for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For SALVE & CO. Chartered Accountants, (Firm's Registration No. 109003W) C. A. S. D. Paranjpe Place: Noida, UP Partner Date : 30th May, 2015. (Membership No. 41472)


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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''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 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"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c. the Balance Sheet, Statement of Profit and Loss and 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; and

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

INDEPENDENT AUDITORS'' REPORT

ANNEXURE TO AUDITORS'' REPORT:

The Annexure referred to in our report to the members of Ferro Alloys Corporation Ltd. (''the Company'') for the year ended 31st March 2014.

We report that :

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) a) Physical verification of inventory has been conducted at reasonable intervals by the Management.

b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

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

iii) 1) The Company has not granted any loan to any of the companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

2) (a) The Company has taken unsecured loan of Rs. 769.71 lacs from two companies covered in Register maintained under Section 301 of the Act. The maximum amount outstanding during the year and the year end balance (including interest) of such loan amounts to '' 773.30 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loan were not prima-facie prejudicial to the interest of the Company.

(c) In respect of above loan the Company is regular in payment of interest, whereever applicable and no amount is overdue.

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

v) a) According to the information and explanations given to us, based on the disclosure of interest made by the directors of the Company, transactions that need to be entered into register in pursuance of Sections 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies (Acceptance of Deposit) Rules 1975.

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

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

ix) a) 1) According to the records examined by us, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities. No amounts are outstanding for transfer to the Investors Education and Protection Fund under Section 205C of the Companies Act,1956.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2014 for a period of more than 6 months from the date they became payable.

ANNEXURE TO AUDITORS'' REPORT:

b) The disputed statutory dues aggregating to Rs. 5194.00 lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:-

Nature of dues Rs. /Lacs Forum where the dispute is pending

CUSTOMS DUTY 10.16 Dy. Commissioner of Customs, Paradip

DUTY 1.13 Customs Excise & Service Tax Appellate Tribunal, Kolkata

137.84 Asst. Commissioner, Central Excise, Customs & Service Tax,Balasore

81.94 Commissioner, Central Excise, Customs and Service Tax,Bhubaneswar

64.96 Commissioner of Customs (Appeals), Kolkata

61.18 Hon''ble High Court, Odisha

8.15 Jt. Secretary (Review) MOF, GOI, CBEC, Delhi

EXCISE 2.20 Asst. Commissioner, Central Excise, Customs & Service Tax,Balasore

DUTY 22.88 Central Excise & Service Tax Appellate Tribunal, West ZoneBench, Mumbai

1190.47 Customs Excise and Service Tax Appellate Tribunal, Kolkata

79.38 Commissioner of Central Excise, Customs & Service Tax, (Appeals) Bhubaneswar

39.10 Jt. Commissioner, Central Excise, Customs & Service Tax, Bhubaneswar-1

SALES TAX 25.08 Additional Commissioner, Sales Tax,Balasore

0.45 Asst. Commissioner, Commercial Taxes,Balasore

10.69 Sales Tax Tribunal, Cuttack

1,393.56 Additional Commissioner, Sales Tax, Cuttack

832.78 Commssionr of Sales Tax Central Zone, Cuttack

ROYALTY 128.71 Dy. Director Mines, J.K. Road (Odisha)

DEMAND 564.19 Director (Mines), Ministy of Mines, New Delhi

38.82 Hon''ble High Court, Odisha

ENTRY TAX 231.83 Additional Commissioner of Sales Tax, Central Zone, Cuttack

INTEREST 251.86 Hon''ble High Court, Odisha_

DEMAND 16.64 Dy. Director Mines, J.K. Road (Odisha)

TOTAL 5,194.00

Nature of dues Period to which the amount related (various years covering the period)

CUSTOM DUTY 1990-91 & 2000-01

DUTY 1999-00 & 2000-01

1981-82, 1982-83, 1985-86, 1988-89, 1989-90, 1990-91, 1996-97, 1997-98, 1999-00,

2000-01 & 2001-02

1997-98 to 2001-02

1995-96, 1997-98

1994-95

EXCISE 1981 DUTY 2001-02 & 2002-03 2007-08 & 2008-09

2005-06, 2007-08, 2008-09 & 2009-10

2011-12, 2012-13

1980-81, 1981-82, 2005-06 & 2006-07

SALES TAX 1999-2000

2000-01 & 2003-04

1988-89, 1999-00, 2001-02, 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12

2007-08

ROYALTY 2002-03, 2003-04, 2008-09 & 2009-10

2005-06

2009-10 & 2010-11

2007-08

2007-08

DEMAND 2008-09 & 2009-10

x) The Company has no accumulated losses as on 31st March 2014 and it has not incurred cash losses during the financial year ended on that date and in the immediately preceding financial year.

xi) In our opinion 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 loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a), (xiii) (b), (xiii) (c) and (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi) The term loans raised during the year by the company have been applied for the purpose for which the said loans were obtained.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

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

xix) During the year covered by our audit report, the Company has not issued any secured debentures.

xx) The Company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For SALVE & CO. Chartered Accountants, (Regn. No. 109003 W)

C. A. K. P. Sahasrabudhe Place : Noida, UP Partner Date : 29th May, 2014. Membership No. 7021


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Ferro Alloys Corporation Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2013, and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended,and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 2 11 of the Companies Act, 1956 ("the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch,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 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”),as amended,issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c. the Balance Sheet, Statement of Profit and Loss and 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 2 11 of the Companies Act, 1956; and

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.

ANNEXURE TO THE AUDITOR''S REPORT:

The Annexure referred to in our report to the members of Ferro Alloys Corporation Limited (''the Company'') for the year ended 31st March, 2013.

We report that:

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) a) Physical verification of inventory has been conducted at reasonable intervals by the Management.

b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

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

iii) 1) The Company has not granted unsecured loan to any of the companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

2) (a) The Company has taken unsecured loan of Rs. 1179.71 lacs from two companies covered in Register maintained under Section 301 of the Act. The maximum amount outstanding during the year and the year end balance (including interest) of such loan amounts to Rs. 1183.61 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loan were not prima-facie prejudicial to the interest of the Company.

(c) In respect of above loan the Company is regular in payment of interest, wherever applicable and no amount is overdue.

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

v) (a) According to the information and explanations given to us, based on the disclosure of interest made by the directors of the Company, transactions that need to be entered into register in pursuance of Sections 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies (Acceptance of Deposit) Rules 1975.

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

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

ix) (a) 1) According to the records examined by us, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities. No amounts are outstanding for transfer to the Investors Education and Protection Fund under Section 205C of the Companies Act,1956.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2013 for a period of more than 6 months from the date they became payable.

x) The Company has no accumulated losses as on 31st March, 2013 and it has not incurred cash losses during the financial year ended on that date and in the immediately preceding financial year.

xi) In our opinion 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 loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a), (xiii) (b), (xiii) (c) and (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi) The term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

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

xix) During the year covered by our audit report, the Company has not issued any secured debentures.

xx) The Company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For SALVE & CO. Chartered Accountants, (Regn.No.109003W)

C.A. K.P. SAHASRABUDHE,

Place: New Delhi Partner

Date: 27th May, 2013 Membership No. 7021


Mar 31, 2012

1. We have audited the attached Balance Sheet of Ferro Alloys Corporation Limited as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to above, we report that :

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

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

(iii) 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 of the Company;

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

(v) On the basis of the written representations received from the Directors as on 31st March, 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto 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,2012;

(b) in the case of 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 cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of the Auditors' Report of even date to the Members of Ferro Alloys Corporation Ltd. on the financial statements for the year ended 31st March, 2012.

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) a) Physical verification of inventory has been conducted at reasonable intervals by the Management.

b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

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

iii) 1) During the year, the Company has not granted unsecured loan to any of the companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

2) (a) During the year, Company has taken unsecured loan of Rs. 463.99 lacs from two companies covered in Register maintained under Section 301 of the Act. The maximum amount outstanding during the year and the year end balance (including interest) of such loan amounts to Rs. 1183.60 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loan were not prima-facie prejudicial to the interest of the Company.

(c) In respect of above loan the Company is regular in payment of interest, whereever applicable and no amount is overdue.

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

v) a) According to the information and explanations given to us, based on the disclosure of interest made by the directors of the Company, transactions that need to be entered into register in pursuance of Sections 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies (Acceptance of Deposit) Rules 1975.

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

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

ix) a) 1) According to the records examined by us, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities. No amounts are outstanding for transfer to the Investors Education and Protection Fund under Section 205C of the Companies Act,1956.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2012 for a period of more than 6 months from the date they became payable.

b) The disputed statutory dues aggregating to Rs. 4,280.49 lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:-

Nature of dues Rs. /Lacs Forum where the dispute is pending Period to which the amount related (various years covering the period) CUSTOMS DUTY 10.16 Dy. Commissioner of Customs, Paradip 1990-91 & 2000-01

DUTY 1.13 Commissioner (Appeal) Central Excise Customs & Sales 1999-00 & 2000-01 Tax, Bhubaneswar

137.84 Asst. Commissioner Central Excise & Customs, Balasore 1981-82, 1982-83, 1985-86, 1988-89, 1989-90, 1990-91, 1996-97, 1997-98, 1999-00, 2000-01 & 2001-02

81.94 Commissioner Central Excise, Customs and Sales Tax, 1997-98 to 2001-02 Bhubaneswar

64.96 Commissioner of Customs (Appeals), Kolkata 1983-84

61.18 Hon'ble High Court, Odisha 1995-96, 1997-98

8.15 Jt. Secretary (Review) MOF, GOI, CBEC, Delhi 1994-95

EXCISE DUTY 2.20 Asst. Commissioner of Central Excise & Service Tax, 1981 Balasore

22.88 Central Excise & Service Tax Appellate Tribunal, West 2001-02 & 2002-03 Zone Bench, Mumbai

1240.47 Customs Excise and Service Tax Appellate Tribunal, 2007-08 & 2008-09 Kolkata

29.03 Commissioner of Central Excise Customs & Service Tax, 2005-06, 2008-09 & 2009-10 (Appeals) Bhubaneswar

SALES TAX 25.08 Additional Commissioner Sales Tax, Balasore 1980-81, 1981-82, 2005-06 & 2006-07

0.45 Asst. Commissioner Commercial Taxes, Balasore 1999-2000

10.69 Sales Tax Tribunal, Cuttack 2000-01 & 2003-04

536.79 Additional Commissioner Sales Tax, Cuttack 1988-89, 1999-00, 2001-02, 2005-06, 2006-07 & 2007-08

0.58 Asst. Commissioner Commercial Taxes, Bhadrak 2001-02

832.78 Commssionr of Sales Tax Central Zone, Cuttack 2007-08

ROYALTY 127.48 Dy. Director Mines, J.K. Road (Odisha) 2002-03 & 2003-04 DEMAND 564.19 Director (Mines), Ministy of Mines, New Delhi 2005-06

38.82 Hon'ble High Court, Odisha 2009-10 & 2010-11

ENTRY TAX 231.83 Additional Commissioner of Sales Tax, Central Zone, 2007-08 Cuttack

INTEREST 251.86 Hon'ble High Court, Odisha 2007-08 DEMAND

Total 4,280.49

x) The Company has no accumulated losses as on 31st March 2012 and it has not incurred cash losses during the financial year ended on that date and in the immediately preceding financial year.

xi) In our opinion 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 loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a), (xiii) (b), (xiii) (c) and (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi) The term loans raised during the year by the company have been applied for the purpose for which the said loans were obtained.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

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

xix) During the year covered by our audit report, the Company has not issued any secured debentures.

xx) The Company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For SALVE & CO.,

Chartered Accountants,

(Regn. No. 109003 W)

Place : New Delhi CA K P Sahasrabudhe

Date : 28th July, 2012 Partner

Membership No. 7021


Mar 31, 2011

We have audited the attached Balance Sheet of Ferro Alloys Corporation Limited as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

1 We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2 As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order, 2004, (together 'the order') issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3 Further to our comments in the Annexure referred to above, we report that :

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

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

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

(iv) In our opinion, subject to Note No. 14 of Schedule K, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Subsection (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of the written representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2011 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 financial statements together with the notes thereon and attached thereto 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,2011;

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

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

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 2 of the Auditors' Report of even date to the Members of Ferro Alloys Corporation Ltd. on the fi nancial statements for the year ended 31st March, 2011.

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) a) Physical verification of inventory has been conducted at reasonable intervals by the Management.

b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

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

iii) 1) During the year, the Company has not granted unsecured loan to any of the companies, firms or other parties covered in the Register maintained under Section 301 of the Act.

2) (a) During the year, Company has taken unsecured loan of Rs. 200.00 lacs from one company covered in Register maintained under Section 301 of the Act. The maximum amount involved and the year end balance (including interest) of such loan amounts to Rs. 201.53 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loan were not primafacie prejudicial to the interest of the Company.

(c) In respect of above loan the Company is regular in payment of interest, whereever applicable and no amount of the principal is overdue.

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

v) a) According to the information and explanations given to us, based on the disclosure of interest made by the directors of the Company, transactions that need to be entered into register in pursuance of Sections 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies (Acceptance of Deposit) Rules 1975.

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

viii) Maintenance of cost records have not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956.

ix) a) 1) According to the records examined by us, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities. No amounts are outstanding for transfer to the Investors Education and Protection Fund under Section 205C of the Companies Act,1956.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2011 for a period of more than 6 months from the date they became payable.

b) The disputed statutory dues aggregating to Rs. 4,850.14 lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

x) The Company has no accumulated losses as on 31st March 2011 and it has not incurred cash losses during the financial year ended on that date and in the immediately preceding financial year.

xi) In our opinion 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 loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii) (a), (xiii) (b), (xiii) (c) and (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi) The term loans raised during the year by the company have been applied for the purpose for which the said loans were obtained.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

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

xix) During the year covered by our audit report, the Company has not issued any secured debentures.

xx) The Company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Salve And Co. Chartered Accountants (Regn. No. 109003 W)

Place : New Delhi CA K.P. Sahasrabudhe

Date : 1st August, 2011. Partner

Membership No.7021


Mar 31, 2010

We have audited the attached Balance Sheet of Ferro Alloys Corporation Limited as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date both 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.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, {together the order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we report that:

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

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

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

(iv) In our opinion, subject to Note No. 14 of Schedule K, the Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of the written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, 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 financial statements together with the notes thereon and attached thereto 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 Profit and Loss Account, of the profit for the year ended on that date; and

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

Referred to in paragraph 2 of the Auditors Report of even date to the Members of Ferro Alloys Corporation Ltd. on the financial statements for the year ended 31st March, 2010.

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) a) Physical verification of inventory has been conducted at reasonable intervals by the Management.

b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

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

iii) 1) During the year, the Company has not granted unsecured loan to any of the companies covered in the Register maintained under Section 301 of the Act. Consequently clauses (iii) (b) to (iii)(d) of the paragraph 4 of the Order are not applicable.

2) (a) During the year, Company has taken unsecured loan of Rs. 455.72 lacs from one company covered in Register maintained under Section 301 of the Act. The maximum amount involved and the year end balance (including interest) aggregate to Rs. 630.72 lacs and Rs.516.38 lacs respectively.

(b) In our opinion, the rate of interest and other terms and conditions of such loans were not prima-facie prejudicial to the interest of the Company.

(c) In respect of above loans the Company is regular in payment of interest, whereever applicable and no amount of the principal is overdue.

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

v) a) According to the information and explanations given to us, based on the disclosure of interest made by the directors of the Company, transactions that need to be entered into register in pursuance of Sections 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies (Acceptance of Deposit) Rules 1975.

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

viii) Maintenance of cost records have not been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956.

ix) a) 1) According to the records examined by us, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities. No amounts are outstanding for transfer to the Investors Education and Protection Fund under Section 205C of the Companies Act,1956.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2010 for a period of more than 6 months from the date they became payable.

b) The disputed statutory dues aggregating to Rs.2347.24 lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:-

Nature of dues Rs. Forum where the dispute is pending

Lacs

CUSTOMS DUTY 11.29 Asst. Commissioner of Customs, Paradeep

137.84 Asst. Commissioner Central Excise & Customs, Balasore 81.94 Commissioner of Central Excise & Customs, Bhubaneswar

64.96 Commissioner of Customs(Appeals), Kolkata

61.18 Honble High Court, Orissa 86.93 CEGAT Eastern Bench, Kolkata EXCISE DUTY

2.20 Asst.Commissioner of Central Excise & Service Tax, Balasore

2.39 Asst.Commissioner of Central Excise & Customs, Bhubaneswar

22.88 Central Excise & Service Tax Appellate Tribunal, West Zone Bench, Mumbai

8.15 Jt. Secretary(Review) MOF.GOI, Delhi SALES TAX

502.71 Asst./Additional Commissioner Sales Tax, Balasore

4.22 Sales Tax Tribunal, Cuttack SERVICE TAX

417.02 Supdt.(Prev.)Central Excise Customs & Service Tax, Bhubaneswar ROYALTY DEMAND 127.48 Dy.Director Mines J.K. Road (Orissa) INTEREST DEMAND 564.19 Dy.Director Mines J.K. Road (Orissa)

251.86 Honble High Court, Orissa

TOTAL 2347.24



Nature of dues Period to which the amount related (various years covering the period)

CUSTOMS DUTY 1990-91,1999-00 & 2000-01

1981-82,1982-83, 1985 86,1988-89,1989-90,1990-

91,1996-97,1997-98,1999-00,2000-01 &

2001-02

1997-98 to 2001-02

1983-84

1995-96 & 1997-98

1999-00 & 2000-01

EXCISE DUTY 1981

1981-82

2001-02 & 2002-03

1994-95

SALES TAX 1980-81,1981-82, 1988-89,

1999-00, 2001-02, 2005-

06 & 2006-07 200304

SERVICE TAX 2005-06 & 2006-07

ROYALTY DEMAND 2002-03 & 2003-04

INTEREST DEMAND 2005-06

2007-08

x) The Company has no accumulated losses as on 31st March 2010 and it has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

xi) In our opinion 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 loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a), (xiii) (d) of the said Order are not applicable,

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions where of are prejudicial to the interest of the Company.

xvi) The Company has not raised any term loan during the year.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

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

xix) During the year covered by our audit report, the Company has not issued any secured debentures.

xx) The Company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Salve And CO.

Chartered Accountants

(Regn. No. 109003 W)



Place : New Delhi CA K.P. Sahasrabudhe

Date : 24th July, 2010 Partner

Membership No. 7021

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