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Auditor Report of India Steel Works Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of India Steel Works Limited, which comprise the Balance Sheet as on March 31, 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 Financial Statements

2. The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. 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.

5. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act and other applicable authorities pronouncements, issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2015;

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

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

Report on other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the 'Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 3 and 4 of the Order.

10. As required by section 143(3) of the Act, we report that:

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

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

c) the Balance Sheet, the 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 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 knowledge and belief and according to the information and explanations given to us-

i. The Company has disclose the impact of pending litigatition on its financial position in its financial statements.

ii. The Company does not have any long-term contracts including derivatives 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, the question of delay of transferring funds does not arise.

Annexure to Independent Auditors' Report

Referred to in paragraph 9 of the Independent Auditors' Report of even date to the members of India Steel Works Limited on the standalone financial statements as of and for the year ended March 31, 2015

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets, pursuance to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

ii. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No major material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

iii. (a) The Company has granted unsecured loans, to two companies covered in the register maintained under Section 189 of the Act. The Company has not granted any secured/unsecured loans to firms or other parties covered in the register maintained under Section 189 of the Act.

(b) In respect of the aforesaid loans, there is no overdue amount more than Rupees One Lac at the year end.

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the meaning of Sections73 to 76 of the Act and the rules framed there under to the extent notified.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records & Audit ) Rules 2014 as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax except property tax of Rs. 28.19 lacs and of Rs. 11.32 lacs out standing for more than Six months as on 31st March, 2015.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, wealth tax and service tax as at March 31,2015 which have not been deposited on account of a dispute, are as follows:

Status Amount (Rs. in Lakhs) Period to which the amount relates

Income Tax Act 2.37 F.Y. - 2011/2012

Sales Tax Act 11.24 F.Y. - 2002/2003

Sales Tax Act 148.28 F.Y. - 2008/2009

Excise Duty 9.64 F.Y. - 2012/2013

Excise Duty 4.30 F.Y. - 2004/2005

Excise Duty 40.98 F.Y. - 2003/2004

Excise Duty 38.00 F.Y. - 2005/2006

Excise Duty 296.91 F.Y. - 2012/2013

Excise Duty 1.91 F.Y. - 2008/2009

Status Forum where the dispute is pending

Income Tax Act CIT (Appeals)

Sales Tax Act Sales Tax Officer

Sales Tax Act Deputy Comm. Of Vat

Excise Duty Addl. Comm. Of Central Excise

Excise Duty Comm. Of Central Excise

Excise Duty CEGAT

Excise Duty Comm. Of Central Excise

Excise Duty DGCI

Excise Duty Comm. Of Central Excise

(c) According to information & explanation given to us there are no amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

viii. The Company has accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

ix. The Company has not defaulted in repayment of dues to any financial institution or bank nor has it issued any debentures as at the balance sheet date. The provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. In our opinion, and according to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions during the year.

xi. The Company has not raised any term loans, Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.

xii. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management,

For and on behalf of - Thanawala& Company Chartered Accountants Firm Reg. No. 110948W

[ V.K. Thanawala ] Place : Mumbai Proprietor Dated : 30/5/2015 Membership No. 15632




Mar 31, 2014

We have audited the accompanying financial statements of INDIA STEEL WORKS LIMITED, which comprise the Balance Sheet as at March 31st, 2014, 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

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 (the Act) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in term of General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs) 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.

AUDITORS'' RESPONSIBILITY

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Statement of profit and Loss Account, of the LOSS of the Company for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the Cash Flows of the company for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1) As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) 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, the Statement of profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) in our opinion, the Balance Sheet, the Statement of profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notifed under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circulars 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs)

e) on the basis of written representations received from the directors as on March 31st, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31st, 2014, from being appointed as a director in terms of Section 274(1)(g) of the Act. ANNEXURE TO INDEPENDENT AUDITORS REPORT Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

1. In regard to Fixed Assets -

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

(b) As explained to us, fixed assets have been physically verifed by the management at reasonable intervals; no material discrepancies were noticed on such verifcation.

(c) In our opinion the company has not disposed off major part of its Fixed Assets during the year.

2. In regard to inventories -

(a) The inventories (Excluding stock with 3rd party and materials transits) have been physically verifed during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No major material discrepancy was noticed on physical verifcation of stocks by the management as compared to book records.

3. (a) The Company has not granted any loans, secured, unsecured loans to the companies, firm or other parties covered in the register maintained under section 301 of the Act. Therefore the provision of clause 4(iii)(b),(c) and (d) of the saidorder are not applicable to the company.

(b) The Company has taken interest free loans from 1 party covered in the register maintained under Section 301 of the Companies Act, 1956. The total amount of such loans received and outstanding as of 31st March 2014 is Rs. 9,55,287/-.

(c) The Company has taken interest free loans as such the terms and conditions on which these loans are taken are not prejudicial to the interest of the Company.

(d) There is no predetermined schedule of repayment of principal;

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. (a) The transactions made in pursuance of contracts of arrangements, that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been recorded in the register;

(b) In our opinion and according to the information and explanations given to us, these transactions 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 each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposit from the public and consequently the provision of Section 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules, 1975 are not applicable.

7. In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Record) 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) The Company has been generally regular in depositing undisputed dues of Provident Fund, Employees State Insurance, Income Tax, Profession Tax, except Property Tax of Rs.30,78,171/- & Cess of Rs.11,32,598/- outstanding for more than six months, as at 31st March 2014.

(b) Details of dues of Sales Tax, Excise Duty & Service Tax which have not been deposited as on 31st March 2014 on account of disputes are given below

Nature of Dues Amount in Rs. In Lacs Period for which dispute relates Forum where dispute is pending

Sales Tax 11.24 FY 2002-03 Sales Tax Officer

Sales Tax 163.28 FY 2008-09 Deputy Comm. Of Vat

Excise Duty 9.64 FY 2012-13 Addl. Comm of Central Excise

Excise Duty 4.30 FY 2004-05 Comm of Central Excise

Excise Duty 40.98 FY 2003-04 CEGAT

Excise Duty 38.00 FY 2005-06 Comm of Central Excise

10. The Company has accumulated losses on 31/03/2014 and has incurred cash loss during the financial year under review but not incurred cash loss in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

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

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has made preferential allotment of shares during the year to the parties and companies covered in the Register maintained under Section 301 of the Companies Act 1956..

19. The Company has no outstanding debentures during the period under audit.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For and on behalf of – Thanawala & Company

Chartered Accountants

Firm Reg. No. 110948W

Place : Mumbai

Dated : 28th May, 2014 [ V.K. Thanawala ]

Proprirtor Membership No. 15632


Mar 31, 2013

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 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; and

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

c) in the case of the Cash Flow statement, of the Cash Flows for the year ended on that date.

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by 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;

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 independent Auditors'' Report

Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

1. In regard to Fixed Assets -

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion the company has not disposed off major part of its Fixed Assets during the year.

2. In regard to inventories -

(a) The inventories (Excluding stock with 3rd party and materials transits) have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No major material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) The Company has not granted any loans, secured, unsecured loans to the companies, firm or other parties covered in the register maintained under section 301 of the Act. Therefore the provision of clause 4(iii)(b),(c) and (d) of the said order are not applicable to the company.

(b) The Company has taken interest free loans from 12 parties covered in the register maintained under Section 301 of the Companies Act, 1956. The total amount of such loans received and outstanding as of 31st March 2013 is Rs.69,93,07,829/-.

(c) The Company has taken interest free loans as such the terms and conditions on which these loans are taken are not prejudicial to the interest of the Company.

(d) There is no predetermined schedule of repayment of principal;

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. (a) The transactions made in pursuance of contracts of arrangements, that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been recorded in the register;

(b) In our opinion and according to the information and explanations given to us, these transactions 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 each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposit from the public and consequently the provision of Section 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules, 1975 are not applicable.

7. In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Record) 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) The Company has been generally regular in depositing undisputed dues of Provident Fund, Employees State Insurance, Income Tax, Profession Tax, except Property Tax of Rs.58,58,009/- & Cess of Rs.11,32,598/- outstanding for more than six months, as at 31st March 2013.

(b) Details of dues of Sales Tax, Excise Duty & Service Tax which have not been deposited as on 31st March 2013 on account of disputes are agiven below

Period for Forum where dispute Nature of Dues Amount in Rs. which dispute relates is pending

Sales Tax 11.24 lacs FY 2002-03 Sales Tax Officer

Sales Tax 18.83 lacs FY 2003-04 JC (Appeals) Sales Tax

Excise Duty 9.64 lacs FY 2012-13 Addl. Comm of Central Excise

Excise Duty 33.53 lacs FY 2005-06 ESTAT

Excise Duty 5.94 lacs FY 2007-08 Comm of Central Excise

Excise Duty 4.29 lacs FY 2004-05 Comm of Central Excise

Excise Duty 40.98 lacs FY 2003-04 CEGAT

Excise Duty 37.99 lacs FY 2005-06 Comm of Central Excise

Service Tax 1.91 lacs FY 2008-09 Comm of Central Excise

10. The accumulated losses of the Company exceeded fifty percent of its net worth of the end of the financial year. The Company has not incurred cash loss during the financial year under review and in the year immediately preceding the financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

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

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made preferential allotment of shares during the year to the parties and companies covered in the Register maintained under Section 301 of the Companies Act 1956..

19. The Company has no outstanding debentures during the period under audit.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For and on behalf of –

THANAWALA & COMPANY

Chartered Accountants

Firm Reg. No. 110948W

Place : Mumbai, [V.K. Thanawala]

Dated : 30th May, 2013 Proprietor

Membership No. 15632


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s INDIA STEEL WORKS LIMITED (Formerly known as ISIBARS LIMITED), as at 31st March, 2012 and also the statement of Profit & Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies [ Auditors Report ) Order, 2003 as amended by companies (Auditors'' Report) (Amendment) Order 2004, (together the 'Order'), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 ('the Act'), and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4 Further to our comments in the Annexure referred to above :-

a. We have obtained all the information and explanations which are 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 these books;

c. The company's Balance Sheet, Statement of Profit and Loss and Cash flow statement dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet, Statement of Profit & 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.

e. On the basis of declarations made by the Directors as on 31st March 2012, none of the directors are, as at 31st March 2012 prima facie disqualified from being appointed as a Director under clause (g) of sub-section (I) of section 274 of the companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said account, subject to points mentioned in above, read together significant accounting policies and other notes there on, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

ii. in the case of the Statement of Profit & Loss, of the LOSS for the year ended on that date.

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



ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph 3 of Auditors' Report of even date to the members of INDIA STEEL WORKS LTD on the financial statements for the year ended 31st March 2012.

1 a. The Company has maintained records of fixed assets upto 31st March 2001, however quantitative details in respect of assets added afterwards are under compilation.

b. The Company has a regular programme of physical verification of its fixed assets which in our opinion is reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, certain fixed assets were physically verified by management during the year.

c. During the year, in our opinion, substantial part of the fixed assets has not been disposed off by the Company.

2. a. The inventories (excluding stock with third parties and materials in transit) have been physically verified by the management during the year, at reasonable intervals;

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

c. The Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of accounts.

3. a. The Company has granted unsecured loans to parties covered under section 301 of the Act. The loans have been advanced to 7 parties amounting to Rs. 91.72 Lacs.

b. The Loans advanced by the Company are interest free loans and as such are prejudicial to the interest of the Company;

c. There is no prescribed stipulation for repayment of principal and interest;

d. The Company has taken interest free loans from 13 parties covered in the register maintained under Section 301 of the Companies Act, 1956. The total amount of such loans received and outstanding as of 31st March 2012 was Rs. 4160.57 Lacs-.

e. The Company has taken interest free loans as such the terms and conditions on which these loans are taken are not prejudicial to the interest of the Company.

f. There is no predetermined schedule of repayment of principal;

4. There are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods.

5. a. On the basis of the audit procedures performed by us and according to the information and explanations given to us on our enquiries on this behalf and the records produced to us for our verification, the transactions required to be entered into the register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/arrangements entered in the Register maintained under Section 301 of the Companies Act 1956 & exceeding the value of Rs 5 Lakhs in respect of some of the items purchased and Labour charges paid are of special nature and suitable alternative sources do not exist for obtaining comparable quotations. There is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services and we have not observed any continuing failure to correct major weaknesses in such internal control system.

6. The Company has not accepted any deposit from the public and consequently the provision of Section 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules, 1975 are not applicable.

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

8. We have broadly reviewed the Books of Accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956, and are of 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 with a view to determine whether they are accurate.

9 a. The Company has been generally regular in depositing undisputed dues of Provident fund, Employees State Insurance, Income Tax, Profession Tax, except Property Tax of Rs. 63.45 Lacs, Cess of Rs. 7.75 Lacs & VAT payable of Rs. 76.07 Lacs outstanding for more than six months, as at 31st March 2012.

b. Details of dues of Sales Tax, Excise Duty & Service Tax which have not been deposited as on 31st March 2012 on account of disputes are given below

Nature of Amount in Period for Forum where dispute Dues Rs. Lacs which dispute dispute is pending relates

Sales Tax 11.24 FY 2002-03 Asstt Comm of Sales Tax

Excise Duty 33.53 FY 2005-06 ESTAT

Excise Duty 5.94 FY 2007-08 Comm of Central Excise

Excise Duty 4.30 FY 2004-05 Comm of Central Excise

Excise Duty 40.98 FY 2003-04 CEGAT

Excise Duty 38.00 FY 2005-06 Comm of Central Excise

Service Tax 1.91 FY 2008-09 Comm of Central Excise

10. The accumulated losses of the Company exceeded fifty percent of its net worth at the end of the financial year. The Company has not incurred cash loss during the financial year under review and in the year immediately preceding the financial year.

11. In our opinion and according to the Information and explanations given to us, the company had delayed in repayment of dues to financial institutions during the financial year, but as on 31st March 2012 there is no overdue.

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

13. The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the Company.

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

15. According to the information and explanations given to us. the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion and according to the information and explanations given to us, the Company has not raised any term loan during the year.

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

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

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

20. On the basis of our examination 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 and on behalf of -

THANAWALA & COMPANY

Chartered Accountants

FirmREg. No 110948W ( V.K. Thanawala )

Proprietor

Membership No. 1563

Place : Mumbai

Dated: 29/05/2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s INDIA STEEL WORKS LIMITED (Formerly known as ISIBARS LIMITED), as at 31st March, 2010 and also the Profit & Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. 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 have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financidl statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the-financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by companies (Auditors Report)(Amendment) Order 2004, (together the Order), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act), and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above :-

a. Balances in the accounts of receivables, loans and deposits, advances, debtors pending confirmation and reconciliation, the extent of possible loss on account of non recovery is not possible to ascertain at present with reasonable accuracy, which may affect revenue, these have been considered as per the books of accounts. Similarly, balances in the accounts of Sundry Creditors, other liabilities, secured and unsecured lenders are subject to confirmation, reconciliation and adjustments, if any, which may affect revenue, are therefore as per the books of accounts. Subject to the above, 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 these books;

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

d. 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 sub-section (3C) of section 211 of the companies act, 1956.

e. On the basis of declarations made by the Directors as on 31st March 2010, none of the directors are, as at 31st March 2010 prima facie disqualified from being appointed as a Director under clause (g) of sub-section (I) of section 274 of the companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said account, subject to points mentioned in above, read together significant accounting policies and other notes there on, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

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

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

Annexure to the Auditors Report

Referred to in paragraph 3 of Auditors Report of even date to the members of INDIA STEEL WORKS LTD on the financial statements for the year ended 31st March 2010.

1. a. The Company has maintained records of fixed assets upto 31st March 2001. however quantitative details in respect of assets added afterwards are under compilation.

b. The Company has a regular programme of physical verification of its fixed assets which in our opinion is reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, certain fixed assets were physically verified by management during the year.

c. During the year, in our opinion, substantial part of the fixed assets has not been disposed off by the Company.

2. a. The inventories (excluding stock with third parties and materials in transit) have been physically verified by the management during the year, at reasonable intervals;

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

a The Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been property dealt with in the books of accounts.

3. a. The Company has granted unsecured loans to parties covered under section 301 of the Act. The loans have been advanced to 11 parties amounting to Rs.2,83,03,588/-

b. The Loans advanced by the Company are interest free loans and as such are prejudicial to the Interest of the Company;

c. There is no prescribed stipulation for repayment of principal and interest;

d. The Company has taken interest free loans from 10 parties covered in the register maintained under Section 301 of the Companies Act, 1956. The total amount of such loans received and outstanding as of 31st March 2010 was Rs. 2,61,38,430/-. There is no prescribed stipulation of repayment of loan and hence there are no overdue amounts more than Rs. 1,00,000/-.

e. The Company has taken interest free loans as such the terms and conditions on which these loans are taken are not prejudicial to the interest of the Company.

f. There is no predetermined schedule of repayment of principal;

4. There are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods.

5. a. On the basis of the audit procedures performed by us and according to the information.and explanations given to us on our enquiries on this behalf and the records produced to us for our verification, the transactions required to be entered into the register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased and Labour charges paid are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services and we have not observed any continuing failure to correct major weaknesses in such internal control system.

6. The Company has not accepted any deposit from the public and consequently the provision of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable. .

7. We have broadly reviewed the Books of Accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956, and are of 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 with a view to determine whether they are accurate.

8. a. The Company has not been regular in depositing undisputed dues of Provident Fund, Employees State Insurance, Income Tax, Profession Tax, Property Tax and Cess.

b. The undisputed dues outstanding for more than six months, as at 31st March 2010, from the date they became payable are as under -

Provident Fund 87.46,934

Property Tax 28.07.554

Cess 55.697

ESIC * 1.80.201

VAT Payable 9.62,914

Details of dues of Sales Tax, & Excise Duty which have not been deposited as on 31st March 2010 on account of disputes are given below

Nature of Dues Amount in Rs. Prior for Which Forum where dispute

The dispute

relates is pending

Sales Tax - 11.24.091/- F.Y. 2002-03 Sales Tax Officer

Excise Duty 33.53.452/- F.Y. 2005-06 CESTAT

Excise Duty 83,09.987/- F.Y. 2005-06 Comm. Of Central

Excise(A)

Excise Duty 40,98,380/- F.Y. 2003-04 Comm. Of Central

Excise

9. The accumulated losses of the Company exceeded fifty percent of its net worth at the end of the financial. The Company has incurred cash loss during the financial year under review and in the year immediately preceding the financial year.

10. In our opinion and according to the information and explanations given to us. the company has not defaulted in repayment of dues to financial institutions banks or debenture holders.

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

12. The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the Company.

13. The Company is not dealing or trading in shares, securities, debentures or other investments and hence the requirements of Para 4(xiv) are not applicable to the Company.

14. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

15. In our opinion and according to the information and explanations given to us. the Company has not raised any term loan during the year.

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

17. The Company has made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

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

19. On the basis of our examination 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 and on behalf of -

THANAWAlAi & COMPANY

Chartered Accountants

Place : Mumbai, ( V.K. Thanawala )

Dated : September 6, 2010 Proprietor

Membership No. 15632

 
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