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Auditor Report of Gopal Iron & Steels Co (Gujarat) Ltd.

Mar 31, 2014

We have audited the attached Balance sheet of Gopal Iron & Steels Co. (Gujarat) limited as at 31st March 2014 and also annexed Profit and Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standard generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

We further report that

(1) 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.

(2) In our opinion, the company has kept proper books of account as required by law so far as appears from our examination of those books.

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

(4) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 read with general circular15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

(5) In our opinion and based on information and explanations given to us, none of the directors is disqualified as on 31-03-2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(6) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the 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 Profit and Loss Account of the Loss for the year ended on that date; and

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

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS REPORT OF EVEN DATE OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2014

On the basis of such checks as we considered appropriate and the terms of the information and explanations given to us, we state that:

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

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

(c) In our opinion, the company has not disposed off any substantial part of its fixed assets so as to effect in it going concern.

2. (a) As explained to us, inventories have been physically verified by the management at the end of the year.

(b) In our opinion and according to the information and given to us the procedure followed by the Management are reasonable and adequate in relation to the size of the company and the nature of the business.

(c) The company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventory as compared to book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to from companies, firms, or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(a) The company has not granted or taken any loans secured or unsecured to companies, firms or other parties cover in the register maintained under Section 301 of the Companies Act, 1956 during the year.

(b) In our opinion and according to the information and given to us, the rate of interest, whenever applicable and other terms and conditions in respect of loans given taken by the company are not prima facie prejudicial to the interest of the company.

(c) In respects of loans taken by the Company from two parties, the loan is interest free and are payable on demand, In respect of loans taken by the company from other parties, the interest and principal amount is payable on demand.

(d) In respect of loans taken by the company, these are repayable on demand and therefore the question of overdue amounts does not arise.

4. In our opinion and according to the information and given to us, there are adequate internal control procedures commensurate with the size of company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods. During the course of audit, no major weakness in internal control had come to notice.

5. (a) On the basis of the audit procedure performed by us, and according to the information and explanations given and representations given to us, we are of the opinion that, the transactions in which directors were interested as contemplated under Section 297 and sub- section (6) of Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, 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 registered maintained u/s 301 of the Companies Act, 1956 exceeding the value of rupees five lacs in respect of any party during the year have been made at parties which are reasonable having regards to prevailing market prices of at that time.

6. The company has not accepted any deposit from public cover u/s 58A of the Companies Act 1956 read along with companies (Acceptance of deposits) rules 1973 and the directive issued by the Reserve Bank of India.

7. The employees of the company have conducted the internal audit. However the same is required to be strengthened.

8. 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.

9. (a) According to the records of the company, it has been generally regularly deposited undisputed statutory dues including Provident Fund, Income tax, Sales Tax, Wealth Tax, Excise Duty and other statutory dues with the appropriate authorities. According to the information and explanation given to us no disputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanation given to us, there is no any disputed demand outstanding during the year under preview except mentioned below:

Sr Nature of Dues Year Amount Involved

1 Sales Tax 2002-2003 Rs. 29.11 Lacs

2006-2007 Rs. 3.64 Lacs

2009-2010 Rs. 21.54 Lacs

2 Excise Duty 1998-1999 Rs. 33.53 Lacs

1999-2000 _

10. The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses both, in the financial year under report and the immediately preceding year.

11. On the basis of the records examined by us and the information and explanation given to us, the company has not defaulted in payment of dues to financial institutions, banks or debenture holders.

12. As examined to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures, or any other securities.

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

14. In our opinion and according to the information and explanation given to us, the Company is not dealing in or trading is respect of shares, securities debentures and other investments. According to the provision of clause 4 (xiv) of the companies (Auditor Report) order 2003 are not applicable to the company.

15. According to the information and explanation given to us, and the representations made by the management, the Company has not given any guarantee for loans taken by others from any bank or financial institution.

16. The company has raised any term loan during the year.

17. According to the information and explanation given to us and on overall examination of the financial statements of the company and after placing reliance on the reasonable assumption made by the company for classification of long term and short term usage''s of funds, we are of the opinion that, prima-facie, long term funds have not been utilized for short term purposes.

18. The companies have not made any preferential allotment of shares of parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.

20. The Company has not issued any money by way of public issue, during the year.

21. According to the information and explanation given to us, and to the best of our knowledge and benefit, no fraud on or by the Company, has been noticed or by the company, during the year that clauses the financial statements to be materially misstated.

Place: Ahmedabad Date: 31-05-2014

For Mehul Kanani & Co. Chartered Accountants

(Mehul Kanani) Proprietor Membership No. 138121


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Gopal Iron and Steels Co. (Gujarat) Limited which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 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 have 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 March 31, 2013;

(b) in the case of the statement 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 Legai and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the companies ("Auditor''s 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 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 read together with note 26 (b) comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

Annexure to the Auditor''s Report

(Referred to in paragraph (1) of our report of even date)

1. (a) Fixed Assets register is under compilation.

(b) We are informed by the management that they have verified the fixed assets during the year. However, in absence of proper fixed assets register, material discrepancies if any, could not be noticed between physical verification and book records. Hence, the fixed assets as appearing in books of account are carried in financial statements.

(c) The Company has not disposed off any major part of the fixed assets during the year and as such the going concern concept is not affected.

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

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and the discrepancies noticed on such physical verification between physical stocks and book records were not material and have been adequately dealt with in the books of account.

3. In respect of loans, secured or unsecured, granted or taken by the company to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

(a) The company has not granted loans to any party hence paragraphs 4(iii) (a), (b), (c), and (d) of Company (Auditors'' Report) Order, 2003 are not applicable to the company.

(b) The company has taken unsecured loan from five parties. The maximum amount involved during the year was Rs. 1,80,36,663 and the year end balance of loan taken from such parties isRs. 1,63,63,453.

(c) In our opinion, the rate of interest and other terms and conditions of such loans taken by the company, are prima facie not prejudicial to the interest of the company. The principal amount is repayable / repaid by the company as agreed in contract.

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

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act, have beeji_entered in the register required to be maintained under that section.

(b) The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rupees five lacs or more in respect of each party, have been made at prices which in our opinion are prima facie reasonable.

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 58 A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public.

The company has accepted fixed deposits from directors and certain shareholders by way of unsecured loans pursuant to requirement of nationalized bank for loans obtained by the company. So long as such loans are outstanding, is not considered as acceptance of deposit from the public falling within the purview of section 58A of the Companies Act, 1956 and the rules framed there under.

We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

7. The company had no internal audit system during the year.

8. We have broadly reviewed the cost records maintained by the company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(l)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed records have been made and maintained. We have not, however made a detailed examination of records with a view to determine whether they are accurate or complete.

9. (a) Undisputed statutory dues including provident fund, investor education & protection fund, employees state insurance, sales tax, wealth tax, custom duty, excise duty, cess wherever applicable have been regularly deposited with appropriate authorities though there has been a slight delay in few cases and in case of income tax and service tax the delay still continuous in two cases.

(b) According to the information and explanations given to us, no undisputed amount in respect of aforesaid statutory dues were outstanding except service tax amounting to Rs. 28,330 and Income tax amounting to T 12,16,633 as at 31st March, 2013 for a period of more than six months from the date they become payable.

(c) The disputed statutory dues aggregating to Rs. 78,31,713 have not been deposited on account of matters pending before appropriate authorities are as under:

Serial Department Period to which Amount Forum where dispute No. it relates (Rs.) is pending

01 Gujarat Sales Tax 2002-2003 29,11,000 Commissioner (A)

2006-2007 3,64,000 Commissioner (A)

2008-2009 12,04,270 Commissioner (A)

02 Central Excise 1998-1999 19,91,363 Commissioner (A)

1999-2000 13,61,080 Commissioner (A)

Total 78,31,713

10. The company has no accumulated losses and has not incurred any cash losses during the current financial year or for immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. The company has not obtained any borrowings from financial institutions or by way of debentures.

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

13. The Company is not a chit fund / Nidhi / Mutual benefit fund / society to which the provisions of special statute relating to chit fund are applicable and hence paragraph 4(xiii) of the Order is not applicable.

14. The Company is not dealing in or trading in shares, securities, debentures, and other investments and hence paragraph 4(xiv) of the order is not applicable.

15. The Company has not given guarantee for loans taken by others from bank or financial institutions.

16. The company has not obtained any term loan during the year.

17. According to the cash flow statement and other records examined by us and the information and explanations given to us, on over all basis funds raised on short-term basis, prima facie, has not been used during the year for long-term investment (fixed assets etc.).

18. . During the year, the company has not made preferential allotment of shares to parties and companies covered in register maintained under section 301 of the companies Act 1956.

19. During the year, the company has not issued any debentures and hence paragraph 4 (xix) of the order is not applicable.

20. During the year, the company has not raised any money by way of public issue and hence paragraph 4(xx) of the Order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the company was noticed or reported during the year.



For KANTILAL PATEL & CO.,

CHARTERED ACCOUNTANTS

Firm Ree. No.l04744Wl



Gopal S. Baldi

Partner

Membership No.:125930



Place: Ahmedabad

Date: June 07, 2013


Mar 31, 2012

We have audited the attached Balance sheet of Gopal Iron & Steels Co. (Gujarat) limited as at 31st March 2012 and also annexed Profit and Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date annexed thereto.

These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standard generally accepted in India.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

We further report that

(1)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.

(2) In our opinion, the company has kept proper books of account as required by law so far as appears from our examination of those books.

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

(4) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

(5) In our opinion and based on information and explanations given to us, none of the directors is disqualified as on 31-03-2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(6) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the 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 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 flow for the year ended on that date.

On the basis of such checks as we considered appropriate and the terms of the information and explanations given to us, we state that:

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

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

(c) In our opinion, the company has not disposed off any substantial part of its fixed assets so as to effect in it going concern.

2. (a) As explained to us, inventories have been physically verified by the management at the end of the year.

(b) In our opinion and according to the information and given to us the procedure followed by the Management are reasonable and adequate in relation to the size of the company and the nature of the business.

(c) The company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventory as compared to book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to from companies, firms, or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(a) The company has not granted or taken any loans secured or unsecured to companies, firms or other parties cover in the register maintained under Section 301 of the Companies Act, 1956 during the year.

(b) In our opinion and according to the information and given to us, the rate of interest, whenever applicable and other terms and conditions in respect of loans given taken by the company are not prima facie prejudicial to the interest of the company.

(c) In respects of loans taken by the Company from two parties, the loan is interest free and are payable on demand, In respect of loans taken by the company from other parties, the interest and principal amount is payable on demand.

(d) In respect of loans taken by the company, these are repayable on demand and therefore the question of overdue amounts does not arise.

4. In our opinion and according to the information and given to us, there are adequate internal control procedures commensurate with the size of company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods. During the course of audit, no major weakness in internal control had come to notice.

5. (a) On the basis of the audit procedure performed by us, and according to the information and explanations given and representations given to us, we are of the opinion that, the transactions in which directors were interested as contemplated under Section 297 and sub- section (6) of Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, 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 registered maintained u/s 301 of the Companies Act, 1956 exceeding the value of rupees five lacs in respect of any party during the year have been made at parties which are reasonable having regards to prevailing market prices of at that time.

6. The company has not accepted any deposit from public cover u/s 58A of the Companies Act 1956 read along with companies (Acceptance of deposits) rules 1973 and the directive issued by the Reserve Bank of India.

7. The employees of the company have conducted the internal audit. However the same is required to be strengthened.

8. 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.

9. (a) According to the records of the company, it has been generally regularly deposited undisputed statutory dues including Provident Fund, Income tax, Sales Tax, Wealth Tax, Excise Duty and other statutory dues with the appropriate authorities. According to the information and explanation given to us no disputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2012 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanation given to us, there is no any disputed demand outstanding during the year under preview except mentioned below:

Sr Nature of Dues Year Amount Involved

1 Sales Tax 2002-2003 Rs. 29.11 Lacs 2006-2007 Rs. 3.64 Lacs

2 Excise Duty 1998-1999 Rs. 33.53 Lacs 1999-2000

10. The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses both, in the financial year under report and the immediately preceding year.

11. On the basis of the records examined by us and the information and explanation given to us, the company has not defaulted in payment of dues to financial institutions, banks or debenture holders.

12. As examined to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures, or any other securities.

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

14. In our opinion and according to the information and explanation given to us, the Company is not dealing in or trading is respect of shares, securities debentures and other investments. According to the provision of clause 4 (xiv) of the companies (Auditor Report) order 2003 are not applicable to the company.

15. According to the information and explanation given to us, and the representations made by the management, the Company has not given any guarantee for loans taken by others from any bank or financial institution.

16. The company has raised a term loan for Expansion Project of Tube Mill and the said term loan was applied for the purpose for which they were raised.

17. According to the information and explanation given to us and on overall examination of the financial statements of the company and after placing reliance on the reasonable assumption made by the company for classification of long term and short term usage''s of funds, we are of the opinion that, prima-facie, long term funds have not been utilized for short term purposes.

18. The companies have not made any preferential allotment of shares of parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.

20. The Company has not issued any money by way of public issue, during the year.

21. According to the information and explanation given to us, and to the best of our knowledge and benefit, no fraud on or by the Company, has been noticed or by the company, during the year that clauses the financial statements to be materially misstated.

Place: Ahmedabad

For Mehul Kanani & Co.

Date: 07-06-2012 Chartered Accountants

(Mehul Kanani)

Proprietor

Membership No. 138121


Mar 31, 2010

We have audited the attached Balance sheet of Gopal Iron & Steels Co, (Gujarat) limited as at 31st March 2010 and also annexed Profit and Loss Account for the year ended on that cate and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standard generally accepted in India Those standards require that we plan and perform the audit to obtain reasonable assurance scout whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 issued by the Centra! Government of India in terms of Section 227 (4A) of the Companies Act. 1956 we enclose in are Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order

We further report that

1) 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.

2) In our opinion, the company has kept proper books of account as required by law so far as appears from our examination of those books.

3) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

4) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

5) In our opinion and based on information and explanations given to us, none of tne directors is disqualified as on 31-03-2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act. 1956.

6) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st : March, 2010;

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

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



ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS REPORT OF EVEN DATE OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2010



On the basis of such checks as we considered appropriate and the terms of the information are experiance given to as we share that.


(b) As explained to us fixed assets, according to the practice of the company, are physically verified by the management at reasonable intervals in a phased verification program, which in cur opinion is reasonable looking to the size of the company and the nature of its business. According to the information and explanation given to us no material discrepancies were noticed on such verification.

(c) In our opinion, the company has not disposed off any substantial part of its fixed assets so as to effect in it going concern.

2. (a) As explained to us, inventories have been physically verified by the management at the end of the year.

(b) In our opinion and according to the information and given to us the procedure followed by the Management are reasonable and adequate in relation to the size of the company and the nature of the business.

(c) The company has maintained proper records of inventories. As explained to us there were no materia! discrepancies noticed on physical verification of inventory as compared to book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to from companies, firms, or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(a) The company has not granted or taken any loans secured or unsecured to companies, firms or other parties cover in the register maintained under Section 301 of the Companies Act, 1956 during the year.

(b) In our opinion and according to the information and given to us, the rate of interest. whenever applicable and other terms and conditions in respect of loans given taken oy the company are not prima facie prejudicial to the interest of the company.

(c) In respects of loans taken by the Company from three parties, the loan is interest bearing and are payable on demand.

(d) In respect of loans taken by the company, these are repayable on demand and therefore the question of overdue amounts does not arise.

4. In our opinion and according to the information and given to us, there are adequate internal control procedures commensurate with the size of company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods. During the course of our previous audit, no major weakness in internal control had come to our notice.

5. (a) On the basis of the audit procedure performed by us, and according to the information and explanations given and representations given to us, we are of the opinion that, the transactions in which directors were interested as contemplated under Section 297 and sub- section (6) of Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, 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 registered maintained u/s 301 of the Companies Act, 1956 exceeding the value of rupees five lacs in respect of any party during the year have been made at parties which are reasonable having regards to prevailing market prices of at that time.

6. The company has not accepted any deposit from public cover u/s 58A of fie Companies Act 1956 read along with companies (Acceptance of deposits) rules 1973 and the directive issued by the Reserve Bank of India.

7. The employees of the company have conducted the internal audit. However the same is required to be strengthened.

8. As per information and explanation given to us the company being a S.S I Unit is exempt from maintenance of cost records as prescribed by the Centra! Government u/s 209{1) of the Companies Act 1956 for any of the products of the company.

9. (a) According to the records of the company, it has been generally regularly deposited undisputed statutory dues including Provident Fund, Income tax, Sales Tax. Wealth Tax, Excise Duty and other statutory dues with the appropriate authorities. According to the information and explanation given to us no disputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2010 for-a period of more than six months from the date of becoming payable.

(b) According to the information and explanation given to us, there is no any disputed demand outstanding during the year under preview except mentioned below:

Sr Nature of Dues Year Amount Involved

1 Income-Tax 1995-1996 Rs. 38.60 Lacs

1996-1997 Rs. 203.57 Lacs

2 Sales Tax 2002-2003 Rs. 29.1l Lacs

10. The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses both, in the financial year under report and the immediately preceding year.

11. On the basis of the records examined by us and the information and explanation given to us, the company has not defaulted in payment of dues to financial institutions, banks or debenture holders.

12. As examined to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures, or any other securities.

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

14. In our opinion and according to the information and explanation given to us, the Company is not dealing in or trading is respect of shares, securities debentures and other investments. According to the provision of clause 4 (xiv) of the companies (Auditor Report) order 2003 are not applicable to the company.

15. According to the information and explanation given to us, and the representations made by the management, the Company has not given any guarantee for loans taken by others from any bank or financial institution.

16. The company has not raised any term loan during the period under review.

17. According to the information and explanation given to us and on overall examination of the financial statements of the company and after placing reliance on (he reasonable assumption made by the company for classification of long term and short term usages of funds, we are of the opinion that, prima-facie, long term funcs have not been utilized for short term purposes.

18. The companies have not made any preferential allotment of shares of parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.

20. The Company has not issued any money by way of public issue, during the year.

21. According to the information and explanation given to us, and to the best of our knowledge and benefit, no fraud on or by the Company, has been noticed or by me company, during the year that clauses the financial statements to be materially misstated.

Place: Ahmedabad

For Jigar S. Shah & Co

Date: 27-05-2010 Chartered Accountants

(Jigar Shah)

Proprietor

 
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