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Auditor Report of Godawari Power & Ispat Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Godawari Power & Ispat 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 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 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 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,

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31st March 2015;

(ii) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) Note no.34 which describes the uncertainty related to investments in Joint Venture Company where the allotted coal block has also been cancelled. No impairment loss has been booked in anticipation that the realizable value of the assets of the JV shall be more than the value of investment of the company. Impact is presently not ascertainable and as such cannot be commented upon by us.

Our opinion is not qualified in respect of these matters.

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 sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 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 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 Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 to the financial statements.

(ii) In our opinion and according to the explanations given to us, the company has not entered into any long- term contracts including 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..

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, in phased verification programme, which, in our opinion, is reasonable, looking to the size of the company and the nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification

(ii) (a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

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

(c) On the basis of our examination of the inventory records of the company, we are of the opinion that, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The company has granted unsecured loans to two companies covered in the register maintained under section 189 of the companies Act, 2013 during the year.

(b) As explained to us the principal amounts are repayable on demand, whereas the interest is payable annually at the discretion of the company.

(c) As explained to us, there was no overdue amount in respect of loan granted to companies listed in the register maintained under Section 189 of the Companies Act,2013.

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

(v) In our opinion and according to the information and explanations given to us the company has not accepted any deposits, in terms of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act,2013, in respect of Company's products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records, have been made and maintained. We have, however, not made a detailed examination of the records.

(vii) (a) According to the information & explanations given to us, during the year the company is regular in depositing 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. According to the information & explanations given to us, no undisputed amounts of statutory dues as stated above were in arrears as at 31st March 2015 for a period of more than six months from the date they became

According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax and cess which have not been deposited on account of any dispute except the cases given below:

Name of the Statute Nature of dues Period

Service Tax Disallowance of credit of Service Tax paid on outward freight 2005-06

Central Excise Act,1944 Duty on Iron Ore Fines & Coal Fines 2008-09 to 2009-10

Central Excise Act,1944 Disallowance of Duty on 2008-09 to 2009-10 Structural items

Central Excise Act,1944 Demand on account of Cenvat credit 2007-08

Central Excise Act,1944 Demand of Duty on account of Related Party transaction 2007-08 to 2008-09

Central Excise Act,1944 Demand of Duty on account of Related Party transaction 2006-07 to 2007-08

Service Tax Demand on account of Suppression of value- retention of Iron ore fines 2009-10 to 2010-11

Service Tax Demand on account of reimbursement of transportation charges & recovery of Incidental charges 2005-06 to 2006-07

Customs Act, 1962 Demand of interest & imposition of penalty for import of Bituminous Coal under the guise of Steam Coal 2012-13

Service Tax Demand on account of Suppression of value- retention of Iron ore fines 2011-12

Central Excise Act,1944 Disallowance of Cenvat credit on Steel items viz. Angles, Channels, Beams, Rounds & Plates used in Equipment Division 2012-13

Central Excise Act,1944 Demand of Service tax credit reversal on as such removal of Iron Ore Fines 2012-13 to 2013-14

Customs Act, 1962 Demand of interest & imposition of penalty for import of Bituminous Coal under the guise of Steam Coal 2012-13

Service Tax Demand on account of Suppression of value- retention of Iron ore fines 2011-12

Central Excise Act,1944 Disallowance of Cenvat credit on Steel items viz. Angles, Channels, Beams, Rounds & Plates used in Equipment Division 2012-13

Central Excise Act,1944 Demand of Service tax credit reversal on as such removal of Iron Ore Fines 2012-13 to 2013-14

Central Excise Act,1944 Disallowance of Cenvat credit on Aluminium Sheets & Coils 2009-10 to 2013-14

Central Excise Act,1944 Disallowance of Cenvat credit on Authorised Service Station Service2011-12 to 2012-13

Central Excise Act,1944 Disallowance of Cenvat credit on Welding Electrodes 2013-14

Service Tax Disallowance of Service tax credit on handling & loading, testing & transportation of Iron Ore Fines and credit on documents in name of head office 2007-08 to 2010-11

Income Tax Act, 1961 Income Tax demand in respect of disallowance made A.Y. 2012-13

Income Tax Act, 1961 Disallowance made in respect of A.Y. 2008-09 erstwhile R.R. Ispat Limited

Income Tax Act, 1961 Penalty in respect of erstwhile A.Y. 2008-09 Hira Industries Limited

C.G. Commercial Tax Commercial Tax 2002-03

Central Sales Tax Tax demand during extension of sales tax exemption not allowed 2007-08

C.G. Commercial Ta Tax demand during extension of sales tax exemption not allowed 2007-08

Chhatisgarh Upkar Adhiniyam 1981 Energy Development Cess May 2006 to Feb 2014

Name of the Statute Amount Forum where dispute is (Rs. in lacs) pending



Service Tax 18.34 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act,1944 83.32 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act,1944 129.43 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act,1944 11.12 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act,1944 63.81 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act,1944 47.72 Customs, Excise and Service Tax Appellate Tribunal, New Delhi Service Tax 151.98 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Service Tax 107.92 Customs, Excise and Service Tax Appellate Tribunal, New Delhi Customs Act, 1962 10.00 Customs, Excise and Service Tax Appellate Tribunal, Bangalore

Service Tax 119.33 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act,1944 62.83 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Central Excise Act,1944 0.24 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Customs Act, 1962 10.00 Customs, Excise and Service Tax Appellate Tribunal, Bangalore Service Tax 119.33 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act,1944 62.83 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Central Excise Act,1944 0.24 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Central Excise Act,1944 6.22 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Central Excise Act,1944 2.45 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Central Excise Act,1944 1.24 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Service Tax 32.05 The Commissioner (Appeals) Central Excise, Customs & Service Tax, Raipur

Income Tax Act, 1961 390.86 Commissioner of Income Tax (Appeals), Raipur

Income Tax Act, 1961 3.24 Commissioner of Income Tax (Appeals), Raipur

Income Tax Act, 1961 0.10 Commissioner of Income Tax (Appeals), Raipur

C.G. Commercial Tax 0.89 Deputy Commissioner, (Appl) Commercial Taxes, Raipur Central Sales Tax 14.07 Addl. Commissioner (Appl), Commercial Taxes, Raipur C.G. Commercial Tax 320.31 Addl. Commissioner (Appl), Commercial Taxes, Raipur

Chhatisgarh Upkar 2804.79 Supreme Court Adhiniyam 1981

(c) According to the information and explanations given to us, amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder have been transferred to such fund within time.

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

(ix) Based on our audit procedures and according to the information and explanations given to us, the company has not defaulted in repayment of dues to the banks, financial institution and debenture holders.

(x) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly the provisions of clause 3(x) of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

(xi) In our opinion, the term loans have been applied progressively for the purpose for which the loans were obtained.

(xii) Based on our audit procedure 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. Therefore, the provisions of clause (xii) of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

For, OPSinghania & Co.

(ICAI Firm Regn.No.002172C)

Chartered Accountants

per Sanjay Singhania

Partner Membership No.076961 Raipur, 16th May,2015


Mar 31, 2014

We have audited the accompanying financial statements of Godawari Power & Ispat Limited ("the Company) which comprise the balance sheet as at 31 March 2014, the statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financia 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") read with the General Circular 15/2013 dtd. 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013 and in accordance with the accounting principles generally accepted in India 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 ndia. 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 ncludes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements

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

Opinion

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

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2014;

(ii) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date

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 subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dtd. 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e. on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 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

Re: Godawari Power & Ispat Limited Referred to in para 1 of Report on Other Legal and Regulatory Requirements of our report of even date.

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, in phased verification programme, which, in our opinion, is reasonable, looking to the size of the company and the nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification

(c) The company has not disposed off any substantial part of its fixed assets during the year so as to affect its going concern status

(ii) (a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable

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

(c) On the basis of our examination of the inventory records of the company, we are of the opinion that, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account

(iii) (a) The company has granted unsecured loans to two companies covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved was Rs 2299.03 lacs and the year-end balance of the loan granted to a company was Rs 484.29 lacs

(b) In our opinion, the terms & conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the company

(c) The receipt of the principal amount and interest wherever applicable was regular

(d) There was no overdue amount of loans granted to companies listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has not taken any secured or unsecured loans during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, therefore, the provisions of clause 4(iii) (e) to (g) of the Companies (Auditor''s Report) Order,

2003 are not applicable to the company

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

(v) (a) According to the information & explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time

(vi) According to the information and explanations given to us, the company has not accepted deposits from public during the year, therefore, the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company

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

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act,1956, in respect of Company''s products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records, have been made and maintained. We have, however, not made a detailed examination of the records

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees'' state insurance, wealth tax, service tax, income tax, sales tax, custom duty, excise duty, cess and other materia statutory dues applicable to it. According to the information & explanations given to us, no undisputed amounts of statutory dues as stated above were in arrears as at 31st March 2014 for a period of more than six months from the date they became payable

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax,

Name of the Status Nature of Dues Year

Service Tax Disallowance of credit of Service 2005-06 Tax paid on outward freight

Central Excise Act, 1944 Duty on Iron Ore Fines & Coal 2008-09 to Fines 2009-10

Central Excise Act, 1944 Disallowance of Duty on 2008-09 to Structural items 2009-10

Central Excise Act,1944 Demand on account of Cenvat 2007-08 credit

Central Excise Act, 1944 Demand of Duty on account of 2007-08 to Related Party transaction 2008-09

Central Excise Act, 1944 Demand of Duty on account of 2006-07 to Related Party transaction 2007-08

Central Excise Act, 1944 Demand on account of Cenvat 2010-11 credit on Coal

Central Excise Act, 1944 Demand of Duty on account of 2011-12 Cenvat credit on steel items

Service Tax Demand on account of Suppression 2009-10 to of value retention of 2010-11 Iron ore fines

Service Tax Demand on account of 2005-06 to reimbursement of transportation 2006-07 charges & recovery of Incidental charges

Custom Act,1962 Demand interest & imposition of 2012-13 penalty for import of Bituminous Coal under the guise of Steam Coal

Income Tax Act, 1956 Income Tax demand in respect of AY.2011-12 disallowance made

Income Tax Act, 1956 Disallowance made in respect of AY.2008-09 erstwhile R. R. Ispat Limited

Income Tax Act, 1956 Penalty in respect of erstwhile AY.2008-09 Hira Industries Limited

Income Tax Act, 1956 Disallowance made in respect of AY.2010-11 erstwhile Hira Industries Limited

C.G. Commercial Tax Act Commercial Tax 2002-03

Central Sales Tax Tax demand during extension of 2007-08 sales tax exemption not allowed

C.G. Commercial Tax Act Tax demand during extension of 2007-08 sales tax exemption not allowed

Name of the Statue Amount Rs in Crores Service Tax 18.34 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act, 1944 83.32 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act, 1944 129.43 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act, 1944 11.12 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act, 1944 63.81 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act, 1944 47.72 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act, 1944 58.68 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise Act, 1944 2.19 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Service Tax 151.98 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Service Tax 107.92 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

Custom Act,1962 10.00 Customs, Excise and Service Tax Appellate Tribunal, Bangalore

Income Tax Act, 1956 18.09 Commissioner of Income Tax (Appeals), Raipur

Income Tax Act, 1956 3.24 Commissioner of Income Tax (Appeals), Raipur

Income Tax Act, 1956 0.10 Commissioner of Income Tax (Appeals), Raipur

Income Tax Act, 1956 43.21 Commissioner of Income Tax (Appeals), Raipur

C.G. Commercial Tax Act 0.89 Deputy Commissioner, (Appl) Commercial Taxes, Raipur

Central Sales Tax 14.07 Addl.Commissioner (Appl), Commercial Taxes, Raipur

C.G. Commercial Tax Act 320.31 Addl.Commissioner (Appl), Commercial Taxes, Raipur

(x) The company does not have any accumulated losses and has not ncurred cash losses during the financial year covered by our audit and also 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 the banks, financial institutions and debenture holders

(xii) In our opinion and according to the information and explanations given to us, the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities

(xiii) In our opinion, the company is not a chit fund or a nidhi / mutua benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company

(xiv) In our opinion and according to information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given corporate guarantees to the bank for loans taken by other company are not prima facie prejudicial to the interest of the company

(xvi) In our opinion, the term loans have been applied progressively for the purpose for which the loans were obtained

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we

are of the opinion that, short-term funds have not been used for long term investment

(xviii) According to the information and explanations given to us the company has not made any preferential allotment of shares during the year covered in the register maintained u/s.301 of the Companies Act,1956, therefore, the provisions of clause 4(xviii) of the Companies (Auditor''s Report) Order,2003 are not applicable to the company

(xix) According to the information and explanations given to us the company has not issued any debentures during the year, therefore, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order,2003 are not applicable to the company

(xx) The company has not raised any money by public issue during the year, therefore, the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order,2003 are not applicable to the company

(xxi) 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, OPSinghania & Co. (ICAI Firm Regn.No.002172C)

Chartered Accountants

per Sanjay Singhania

Partner Membership No.076961

Raipur, 24th May, 2014


Mar 31, 2013

Report on the fnancial statements

We have audited the accompanying fnancial statements of Godawari Power & Ispat Limited ("the Company) which comprise the balance sheet as at 31 March 2013, the statement of proft and loss and the cash fow statement for the year then ended and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows 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 fnancial 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 fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.

We believe that the audit evidence we have obtained is suffcient 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 fnancial 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 31 March 2013;

(ii) in the case of the statement of proft and loss, of the proft for the year ended on that date; and

(iii) in the case of the cash fow statement, of the cash fows 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 specifed 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 Proft 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 Proft and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

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

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

(b) As explained to us, the fxed assets have been physically verifed by the management at reasonable intervals, in phased verifcation programme, which, in our opinion, is reasonable, looking to the size of the company and the nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verifcation.

(c) The company has not disposed off any substantial part of its fxed assets during the year so as to affect its going concern status.

(ii) (a) As explained to us, inventories have been physically verifed during the year by the management. In our opinion, the frequency of the verifcation is reasonable.

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

(c) On the basis of our examination of the inventory records of the company, we are of the opinion that, the company is maintaining proper records of inventory. The discrepancies noticed on verifcation between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The company has granted unsecured loans to three companies covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved was Rs.5603.00 lacs and the year- end balance of the loan granted to a company was Rs.2263.12 lacs.

(b) In our opinion, the terms & conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the company.

(c) The receipt of the principal amount and interest wherever applicable was regular.

(d) There was no overdue amount of loans granted to companies listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has taken unsecured loans from three companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year, maximum amount involved was Rs.4634.47 lacs and the year end balance of the loan taken from companies was Rs.Nil.

(f) In our opinion, the terms & conditions on which loans have been taken from the companies listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the company.

(g) The company was regular in repaying the amount as stipulated.

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

(v) (a) According to the information & explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the company has not accepted deposits from public during the year, therefore, the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

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

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act,1956, in respect of Company''s products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records, have been made and maintained. We have, however, not made a detailed examination of the records.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees'' state insurance, wealth tax, service tax, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information & explanations given to us, no undisputed amounts of statutory dues as stated above were in arrears as at 31st March 2013 for a period of more than six months from the date they became payable.

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

Name of the Statue Nature of Dues Year

Service Tax Disallowance of credit of Service 2005-06 Tax paid on outward freight

Central Excise Act,1944 Duty on Iron Ore Fines & Coal 2008-09 to Fines 2009-10

Central Excise Act,1944 Disallowance of Duty on 2008-09 to Structural items 2009-10

Central Excise Act,1944 Demand on account of Cenvat 2007-08 credit

Central Excise Act,1944 Demand on account of Cenvat 2008-09 credit

Central Excise Act,1944 Demand on account of Cenvat 2008-09 on Input Services

Central Excise Act,1944 Demand of Duty on account of 2007-08 to Related Party transaction 2008-09

Central Excise Act,1944 Demand of Duty on account of 2006-07 to Related Party transaction 2007-08

Service Tax Demand on account of credit on 2009-10 to Vibrating Steel Spring Screen 2010-11

Central Excise Act,1944 Demand on account of Cenvat 2010-11 credit on Coal

Income Tax Act, 1956 Disallowance made in respect of 2008-09 erstwhile R.R. Ispat Limited

Income Tax Act, 1956 Penalty in respect of erstwhile 2008-09 Hira Industries Limited

Income Tax Act, 1956 Disallowance made in respect of 2010-11 erstwhile Hira Industries Limited

C.G. Commercial Tax Commercial Tax 2002-03 Act

Amount (Rs. Forum where dispute is pending In lacs)

18.34 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

83.32 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

129.43 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

11.12 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

5.31 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

6.39 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

63.81 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

47.72 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

0.46 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

58.68 Customs, Excise and Service Tax Appellate Tribunal, New Delhi

3.24 Commissioner of Income Tax (Appeals),Raipur

0.10 Commissioner of Income Tax (Appeals),Raipur

43.21 Commissioner of Income Tax (Appeals),Raipur

1.46 Deputy Commissioner, (Appl) Commercial Taxes, Raipur

Name of the Statue Nature of Dues Year

Central Sales Tax Demand of Central Sales Tax 2002-03

Central Sales Tax Tax demand during extension of 2007-08 sales tax exemption not allowed

C.G. Commercial Tax Tax demand during extension of 2007-08 Act sales tax exemption not allowed

Amount (Rs. Forum where dispute is pending In lacs)

23.18 Deputy Commissioner, (Appl) Commercial Taxes, Raipur

14.07 Addl.Commissioner (Appl), Commercial Taxes, Raipur

320.31 Addl.Commissioner (Appl), Commercial Taxes, Raipur

(x) The company does not have any accumulated losses and has not incurred cash losses during the fnancial year covered by our audit and also in the immediately preceding fnancial 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 the banks, fnancial institutions and debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given corporate guarantees to the bank for loans taken by other company are not prima facie prejudicial to the interest of the company.

(xvi) In our opinion, the term loans have been applied progressively for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we are of the opinion that, short-term funds have not been used for long term investment.

(xviii) According to the information and explanations given to us the company has made preferential allotment of shares during the year covered in the register maintained u/s.301 of the Companies Act,1956 and we are of the opinion that such allotments are not prejudicial to the interest of the company.

(xix) The company has created securities/charges in respect of secured debentures issued during the year.

(xx) The company has not raised any money by public issue during the year, therefore, the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order,2003 are not applicable to the company .

(xxi) 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, OPSinghania & Co. (Firm Regn.No.002172C) Chartered Accountants



per O.P.Singhania Partner Membership No.051909

Raipur, 28th May,2013


Mar 31, 2012

1. We have audited the attached balance sheet of Godawari Power & Ispat Limited as at 31st March, 2012, the statement of profit and loss and also the cash flow statement for the year ended on that date, 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 (As Amended) 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 matter specified in paragraphs 4 and 5 of the said order.

4. Further to our comment 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 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;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us the said accounts read along 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:

(a) in the case of the balance sheet, of the state of the affairs of the Company, as at 31st March, 2012;

(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.

Referred to in paragraph 3 of our report of even date,

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, in phased verification programme, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

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

(ii) (a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

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

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The Company has granted unsecured loans to two companies covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved was Rs. 125.00 lacs and the year-end balance of the loan granted to a company was Rs. NIL.

(b) In our opinion, the terms & conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the Company.

(c) The receipt of the principal amount and interest wherever applicable was regular.

(d) There was no overdue amount of loans granted to companies listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company has taken unsecured loans from five companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year, maximum amount involved was Rs. 3767.62 lacs and the yearend balance of the loan taken from companies was Rs. 534.47 lacs.

(f) In our opinion, the terms & conditions on which loans have been taken from the companies listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the Company.

(g) The Company was regular in repaying the amount as stipulated.

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

(v) (a) According to the information & explanations given to us,

we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has compiled with the provisions of Section 58A and 58AA of the Companies Act,1956 and are any other relevant provisions of the Act and the rules framed there under, directives issued by RBI wherever applicable, with regard to the deposits accepted during the year.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(i)(d) of the Companies Act,1956, in respect of Company's products to which they said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records, have been made and maintained. We have, however, not made a detailed examination of the records.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, wealth tax, service tax, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information & explanations given to us, no undisputed amounts of statutory dues as stated above were in arrears as at 31st March, 2012 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 dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute except the following:

Name of the Statute Nature of Dues Year

Disallowance of credit of 2005-06 Service Tax service tax Paid on onward freight

Service Tax on ECB 2006-07 to Service Tax Commission 2008-09

Demand on account of 2009-10 & Service Tax vibrating steel spring screen 2010-11

Duty on Iron Ore Fines & Coal 2008-09 to Central Excise Act Fines 2009-10

Disallowance of Duty on 2008-09 to Central Excise Act Structural Items 2009-10

Demand on account of cenvat

Central Excise Act 2007-08 credit

Demand on account of cenvat

Central Excise Act 2008-09 credit

Demand on account of Cenvat

Central Excise Act 2008-09 on Input Services

Disallowance of Cenvat on

Central Excise Act 2008-09

Capital Goods

Demand of duty on account of 2007-08 to

Central Excise Act

Related Party transaction 2008-09 Demand of duty on account of 2006-07 to

Central Excise Act

Related Party transaction 2007-08 Demand on account of CENVAT 2007-08 to

Central Excise Act on input services 2009-10

Demand on account of CENVAT 2007-08 to Central Excise Act on Welding Electrodes 2010-11

Demand of interest on delay

Central Excise Act 2007-08

payment of differential duty

Demand on account of CENVAT

Central Excise Act 2009-10

on input services

Demand on account of CENVAT 2007-08 & 2008- Central Excise Act on input short receipt and 09

debit note raised

Disallowance of duty on

Central Excise Act 2010-11

structural items

Demand on account of CENVAT

Central Excise Act 2010-11

on Welding Electrodes

Income Tax Act Income Tax 2008-09

C.G. Commercial Tax Act Commercial Tax 2002-03



Name of the Statute Amount (Rs.In lacs) Forum where dispute is pending

Service Tax 18 34 Custom, Excise and Service Tax Appellate Tribunal, New Delhi.

Service Tax Commissioner (Appeals), Central Excise, 8.52 Raipur

Service Tax 0.46 Commissioner (Appeals), Central Excise, Raipur

Central Excise Act 83.32 Custom, Excise and Service Tax Appellate ' Tribunal, New Delhi.

Custom, Excise and Service Tax Appellate Central Excise Act 129.43 Tribunal, New Delhi.

Central Excise Act 11.12 Custom, Excise and Service Tax Appellate Tribunal, New Delhi.

Central Excise Act Custom, Excise and Service Tax Appellate 5.31 Tribunal, New Delhi.

Central Excise Act 6 39 Custom, Excise and Service Tax Appellate ' Tribunal, New Delhi.

Central Excise Act 16 69 Custom, Excise and Service Tax Appellate ' Tribunal, New Delhi.

Central Excise Act 63 81 Custom, Excise and Service Tax Appellate ' Tribunal, New Delhi.

Central Excise Act 47.72 Custom, Excise and Service Tax Appellate ' Tribunal, New Delhi.

Commissioner (Appeals), Central Excise, Central Excise Act 1.08 Raipur

Central Excise Act 3 22 Commissioner (Appeals), Central Excise, Raipur

Commissioner (Appeals), Central Excise, Central Excise Act 1.08 Raipur

Central Excise Act 0.17 Commissioner (Appeals), Central Excise, Raipur

Central Excise Act 0 85 Commissioner (Appeals), Central Excise, Raipur

Commissioner (Appeals), Central Excise, Central Excise Tax 1.84 Raipur

Central Excise Act 2.78 Commissioner (Appeals), Central Excise, Raipur

Commissioner of Income Tax Income Tax Act 3.24 (Appeals),Raipur

C.G. Commercial Tax Act 1.46 Deputy Commissioner, (Appl) Commercial Taxes, Raipur



Name of the Statute Nature of Dues Year

Central Sales Tax Demand of Central Sales Tax 2002-03

Tax demand during extension Central Sales Tax of sales tax exemption not 2007-08 allowed

Tax demand during extension C.G. Commercial Tax Act of sales tax exemption not 2007- 08 allowed



Name of the Statute Amount Forum where dispute is pending (Rs. In lacs)

Central Sales Tax Deputy Commissioner, (Appl) Commercial 23.18 Taxes, Raipur

Central Excise Tax 14.07 Addl. Commissioner (Appl), Commercial ' Taxes, Raipur

C.G. Commercial Tax Act 248.85 Addl. Commissioner (Appl), Commercial Taxes, Raipur

(x) The Company does not have any accumulated losses and has not incurred cash losses during the financial year covered by our audit and also 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 the banks, financial institutions and debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion and according to information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given corporate guarantees to the bank for loans taken by other company are not prima facie prejudicial to the interest of the Company.

(xvi) In our opinion, the term loans have been applied progressively for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that, short-term funds have not been used for long term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to any company, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xix) The Company has created securities/charges in respect of secured debentures issued except debenture application money received during the year on which securities/charges created in the subsequent financial year.

(xx) The Company has not raised any money by public issue during the year, therefore, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order,2003 are not applicable to the Company .

(xxi) 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. Therefore, the provisions of clause 4(xxi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

For, O P Singhania & Co.

(Firm Regn.No.002172C)

Chartered Accountants

SANJAY SINGHANIA Partner

Membership No.076961

Raipur, 22nd May, 2012


Mar 31, 2011

1. We have audited the attached balance sheet of Godawari Power & Ispat Limited as at 31st March, 2011, the profit and loss account and also the cash flow statement for the year ended on that date, 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 (As Amended) 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 Annexurea statement on the matter specified in paragraphs 4 and 5 of the said order.

4. Further to our comment 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 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;

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors as on 31st March 2011, and taken on record by the Board of Directors, we report that 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 accounts read alongwith 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:

(a) in the case of the balance sheet, of the state of the affairs of the Company, as at 31st March, 2011.

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Annexure Re: Godawari Power & Ispa: Limited Referred to in paragraph 3 of our report of even date,

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, in phased verification programme, which, in our opinion, is reasonable, looking to the size of the company and the nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The company has not disposed off any substantial part of its fixed assets during the year so as to affect its going concern status.

(ii) (a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

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

(c) On the basis of our examination of the inventory records of the company, we are of the opinion that, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The company has granted unsecured loans to two companies covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved was Rs. 110.11 lacs and the year-end balance of the loan granted to a company was Rs. 11.88 lacs.

(b) In our opinion, the terms & conditions on which loans have been granted to the companies listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the company.

(c) The receipt of the principal amount and interest wherever applicable was regular.

(d) There was no overdue amount of loans granted to companies listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has taken unsecured loans from five companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year, maximum amount involved was Rs. 7047.28 lacs and the year end balance of the loan taken from companies was Rs. 3617.89 lacs.

(f) In our opinion, the terms & conditions on which loans have been taken from the companies listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the company.

(g) The company was regular in repaying the amount as stipulated.

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

(v) (a) According to the information & explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the company has not accepted deposits from public during the year therefore, the provisions of clause 4(vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(i)(d) of the Companies Act,1956, in respect of Company's products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records, have been made and maintained. We have, however, not made a detailed examination of the records.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, wealth tax, service tax, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information & explanations given to us, no undisputed amounts of statutory dues as stated above were in arrears as at 31 st 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 dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute except the following:

Name of the Amount Forum where dispute is Nature or Dues Year (Rs. In lacs) pending Statue

service Tax Disallowance of credit of 2005-06 18.34 Custom, Excise and Service Tax service tax Paid on onward Appellate Tribunal, New Delhi. freight

Service Tax Service Tax - Demand on 2004-05 to 49.93 Custom, Excise and Service Tax GTOetc. 2006-07 Appellate Tribunal, New Delhi.

Central Excise Act Duty on Iron Ore Fines & 2008-09 to 83.32 Custom, Excise and Service Tax Coal Fines 2009-10 Appellate Tribunal, New Delhi.

Central Excise Act Disallowance of Duty on 2008-09 to 142.43 Custom, Excise and Service Tax Structural Items 2009-10 Appellate Tribunal, New Delhi.

Central Excise Act Demand on account of 2007-08 11.12 Custom, Excise and Service Tax cenvat credit Appellate Tribunal, New Delhi.

Central Excise Act Demand on account of 2008-09 7.59 Custom, Excise and Service Tax cenvat credit Appellate Tribunal, New Delhi.

Central Excise Act Demand on account of 2008-09 9.13 Custom, Excise and Service Tax Cenvat on Input Services Appellate Tribunal, New Delhi.

Central Excise Act Disallowance of Cenvat on 2008-09 16.69 Custom, Excise and Service Tax Capital Goods Appellate Tribunal, New Delhi.

Central Excise Act Demand of duty on account 2007-08 to 63.81 Custom, Excise and Service Tax

of Related Party transaction 2008-09 Appellate Tribunal, New Delhi.

Central Excise Act Demand of duty on account 2006-07 to 47.72 Custom, Excise and Service Tax of Related Party transaction 2007-08 Appellate Tribunal, New Delhi.

Income Tax Act Income Tax A.Y. 2007-08 4.01 Commissioner of Income Tax (Appeals),Raipur

Income Tax Act Income Tax A.Y. 2008-09 25.25 Commissioner of Income Tax (Appeals), Raipur

C G. Commercial Commercial Tax 2002-03 1.46 Deputy Commissioner, (Appl) Tax Act Commercial Taxes, Raipur

Central Sales Tax Demand of Central Sales Tax 2002-03 23.18 Deputy Commissioner, (Appl) Commercial Taxes, Raipur

(x) The company does no: have any accumulated losses and has not incurred cash losses during the financial year covered by our audi: and also 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 the banks.

(xii) In our opinion and according to the information and explanations given to us, the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given corporate guarantees to the bank for loans taken by other company are not prima facie prejudicial to the interest of the company.

(xvi) In our opinion, the term loans have been applied progressively for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we are of the opinion that, short-term funds have not been used for long term investment.

(xvi ii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to any company, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xix) The company has created securities/charges in respect of secured debentures issued.

(xx) The company has not raised any money by public issue during the year, therefore, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order,2003 are not applicable to the company.

(xxi) 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. Therefore, the provisions of clause 4(xxi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

For OPSinghania & Co.

(Firm Regn.No.002172C)

Chartered Accountants

O.P.Singhania

Partner

Raipur, 22nd May,2011 Membership No.:051909


Mar 31, 2010

1. We have audited the attached balance sheet of Godawari Power & Ispat Limited as at 31st March, 2010, the profit and loss account and also the cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (As Amended) issued by the Central Government of India, in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we enclose in theAnnexurea statement on the matter specified in paragraphs 4 and 5 of the said order.

4. Further to our comment 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 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;

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us the said accounts read alongwith 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:

(a) in the case of the balance sheet, of the state of the affairs of the Company, as at 31st March, 2010.

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date. ANNEXURE Re: Godawari Power & Ispat Limited Referred to in paragraph 3 of our report of even date, (i) (a) The Company has maintained the proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, in phased verification programme, which, in our opinion, is reasonable, looking to the size of the company and the nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The company has not disposed off any substantial part of its fixed assets during the year so as to affect its going concern status.

(ii) (a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

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

(c) On the basis of our examination of the inventory records of the company, we are of the opinion that, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The company has not granted any secured or unsecured loans to companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956. Therefore, the provisions of clause 4(iii) (a) to (d) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(e) The company has taken unsecured loans from a company covered in the register maintained under section 301 of the Companies Act, 1956 during the year, maximum amount involved was Rs.1000.00 lacs and the year end balance of the loan taken from such party was NIL.

(f) In our opinion, the terms & conditions on which loans have been taken from a company listed in the register maintained under section 301 of the Companies Act 1956, are not prima facie prejudicial to the interest of the company.

(g) The company was regular in repaying the amount as stipulated.

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

(v) (a) According to the information & explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the company has not accepted deposits from public during the year therefore, the provisions of clause 4(vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

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

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(i)(d) of the Companies Act, 1956, in respect of Companys products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records, have been made and maintained. We have, however, not made a detailed examination of the records.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, wealth tax, service tax, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information & explanations given to us, no undisputed amounts of statutory dues as stated above were in arrears as at 31 st March 2010 for a period of more than six months from the date they became payable.

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

Name of the Nature of Dues Year

Statue

Service Tax Disallowance of credit of Service Tax 2005

paid on onward freight and credit taken on the strength of TR6 Challan

Central Sales Tax Direct Export not considered and 2005-06

imposed CST

Central Excise Act Disallowance of Cenvat Credit on Input Oct,2004 to July, 2008



Name of the Amount Forum where dispute is

Statue (Rs. in lacs) pending

Service Tax 20.74 Custom, Excise and Service Tax Appellate Tribunal, New Delhi.

Central Sales Tax 3.24 Addl. Commissioner of

Commercial Tax (Appeal), Raipur

Central Excise Act 495.44 Custom, Excise and Service Tax Appellate Tribunal, New Delhi.

(x) The company does not have any accumulated losses and has not incurred cash losses during the financial year covered by our audit and also 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 the banks.

(xii) In our opinion and according to the information and explanations given to us, the company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion and according to information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given corporate guarantees to the bank for loans taken by other company are not prima facie prejudicial to the interest of the company.

(xvi) In our opinion, the term loans have been applied progressively for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we are of the opinion that, short-term funds have not been used for long term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to any company, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of clause 4 of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xix) The company has not issued any debentures during the year. Therefore, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xx) The company has not raised any money by public issue during the year, therefore, the provisions of clause 4(xx) of the Companies (Auditors Report) Order,2003 are not applicable to the company .

(xxi) 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. Therefore, the provisions of clause 4(xxi) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

For, OP Singhania & Co.

(Firm Registration No.002172C) Chartered Accountants

O.P.SINGHANIA

Partner Membership No.: 51909

Mumbai, 30th May,2010

 
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