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Auditor Report of Mercury Metals Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of M/s. MERCURY METALS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit & Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") , read with General circular 8/ 2014 dated April 4,2014 ,issued by the ministry of corporate affairs. The responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by 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 managements, 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 Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

(b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date.

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

Emphasis of Matter

We draw attention to Note 19 & 22 of the financial statements regarding Non provision of interest payable & diminuation in value of inventory of shares of listed companies respectively. Company has not made provision for Interest Payable to Charotar Nagrik Sahakari Bank Limited towards their OTS. Further, company has not provided for diminution in value of inventories of listed companies as per Accounting Standard - 13 ''Accounting for Investments''. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. Provision for 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 acquired by section 227(3) of the Act subject to our comments in Emphasis of Matter , we report that:

a. We have obtain 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 and Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet , Statement of Profit and Loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT

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

(i) As per information and explanation provided to us, The company has no fixed assets during the year.

(ii) (a) As explained to us, since stock of the company comprises shares in Demat as well as physical certificate form and other traded goods has been physically varified by the management during the year & stock items at the end of the year verified with respect to corresponding Demat statement and physical certificate at the end of the year.

(b) The procedures explained to us, which are followed by the management, for such physical verification of the inventories are in our opinion, reasonable and adequate in relation to the size of the company and nature of its business.

(c) On the basis of our examination of the inventory records of the company, we are of the opinion that the company is maintaining proper records of its inventory. No material discrepancies were noticed on physical verification of the inventory as compared to book records.

(iii) According to the information and explanation given to us, the Company has not granted/taken any unsecured loans to/from companies & firms listed in the register maintained under section 301 of the Companies Act 1956.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of company and nature of its business with regard to purchase of trading goods and with regard to sale of goods.

(v) In our opinion and according to the information and explanations given to us, there is no transaction 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 500000 or more in respect of any party maintained under section 301 of the Companies Act 1956, have been so entered.

(vi) The Company has not accepted any deposits from Public and hence the provision of section 58A and 58AA of the Act and rules framed there under are not applicable to the Company.

(vii) In our opinion, the intrnal audit system of the Company is commensurate with its size and natue of its business.

(viii) In our opinion and according to the information and explanations given to us, maintenance of cost records has not been prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 for any products of the company.

(ix) (a) According to the information and explanation given to us and the books and records examined by us, there are no undisputed amounts payable in respect of Income-tax, Sales-Tax outstanding as at 31st March 2014 for a period exceeding six months from the date they became payable.

(b) On the basis of our examination of the documents and records, there is no disputed amount pending in respect of any statutory dues.

(x) In our opinion Company has registered for a period not less than five year, its accumulated losses at the end of the financial year 19,50,96,952 and during previous year it has incurred cash losses of 5,32,100 And in immediately preceding financial year it was Rs. 4,78,030.

(xi) As per information and explanation provided to us, The company has rearrange in OTS scheme of the secured loan payable to Charotar Nagarik Sahakari Bank Ltd. But installments due of 202.24 Lacs for the year 2013-14 under OTS scheme are not paid by the company.

(xii) As explained to us the company has not granted any loans on the basis of the security by way of pledge of shares, debentures or any other securities.

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

(xiv) In our opinion, the company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments and that timely entry have been made therein. The shares and other securities have been held by comapny in its own name.

(xv) According to the information and explanation given to us and representation made by the management, the company has not given any guarantee for loans taken by others from any banks or financial institution.

(xvi) In our opinion the term loans have been applied for the purpose for which there were raised.

(xvii) According to the information and explanation given to us and an overall examination of the balance sheet of the Company, we report that the no funds raised on short-term basis have been used for the long term investment.

(xviii) The company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

(xix) On the basis of the records and documents examined by us, the Company has not issued any secured debentures during the year.

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

(xxi) According to the information and explanation given to us and to the best of our knowledge and belief no fraud on or by the company, has been noticed or reported by the company during the year.

For AMBALAL PATEL & CO. Chartered Accountants Firm Reg. No. : 100305W

CA Ratan Jethaliya Ahmedabad Partner 22/05/2014 M.No. 47398


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of MERCURY METALS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March , 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the 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 and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the 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 the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(b) In the case of the Statement of Profit and Loss, of the profit 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 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, subject to our comment in below paragraph 3, we report that:

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

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

(c) The Balance Sheet, 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, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

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

3. a) Valuation of investments at cost as stated in note no. 7

b) Non Provision of Book Debts as stated in Note No.8

c) Non Provision of Interest as stated in Note No.18

ANNEXURE REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE

Annexure referred to in paragraph 3 of the Auditor''s Report of even date to the members of MERCURY METALS LIMITED on the financial statement for the year ended 31st March,2013.

1 As per information and explanation provided to us, The company has no fixed assets during the year.

2 As explained to us, the inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and the nature of its business.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 the business.The company has maintained proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of the having regard to the size of the operations of the Company.

3 We are informed that the Company has not taken any loans, secured or unsecured, from/to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

4 As per information and explanation provided to us, There are no transaction of Purchase of Fixed assets and inventory or sale of goods, hence no internal control required.

5 In our opinion and according to the information and explanations given to us, there is no transaction 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 Rs.500000 or more in respect of any party.

6 As per information and explanation provided to us, The Company has not accepted any deposits from the public hence provision required Us 58A & 58AA are not applicable.

7 In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

8 As per information and explanation provided to us, The Central Government has not prescribed maintenance of cost Records under Section 209 (1) (d) of the Companies Act, 1956.

9 According to the information and explanations given to us, there are no undisputed statutory dues payable respect of Provident Fund, Investor Education and Protection Fund, Employees state Insurance, Income-tax Sales-tax, Wealth Tax, Custom Duty, Excise duty, cess which are outstanding as at 31st March,2013 for a period of more than six months from the date they became payable.

10 In our opinion Company has registered for a period not less than five year, its accumulated losses at the end of the financial year Rs. 17,39,31,455.69 and during previous year it has incurred cash losses of Rs. 4,78,030.54 And in immediately preceding financial year it was NIL.

11 As per information and explanation provided to us, The company has rearrange in OTS scheme of the secured loan payable to Charotar Nagarik Sahakari Bank Ltd. But Installments due of Rs. 202.24 Lacs for the year 2012-13 under OTS scheme are not paid by the company.

12 According to information and explanation provided 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 and in our opinion, adequate documents and records are not required to maintained.

13 The company is not chit Fund, Nidhi and Mutual Fund society; hence requirements of item (Xiii) of paragraph 4 of the order are not applicable to the company.

14 According to the information and explanations given to us, proper records have been maintained in respect of transactions and contracts, in shares, securities, debentures and other investments and timely entries have been made therein. The shares and other securities have been held by the company in its own name.

15 According to the information and explanations given to us, the company has not given any guarantee for loans taken by others during the year.

16 As per information provided to us, The company has not taken any term loans and hence requirement of reporting regarding application of term loans does not arise.

17 In our opinion, No short term loan was applied for long term investment.

18 We are informed that the company has not made any preferential allotment of shares to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

19 As per information provided to us, The company has not issued debentures and hence requirement of reporting regarding creation of securities in respect of debentures issued does not arise.

20 According to information and explanation provided to us, The company has not raised any money by public issue during the year.

21 According to information and explanation given to us no fraud on or by the company has been noticed or reported during the course of audit.



For, Badrilal Punglia & Co.

Chartered Accountant



Sd/-

B. L. Punglia

Proprietor

Membership No. : 034230

Place:Ahmedabad FRN. : 100827W

Date :29/05/2013 PAN : AEHPP2017D


Mar 31, 2012

We have audited the attached Balance Sheet of MERCURY METALS LIMITED as at 31st MARCH,2012 and the Statement of Profit and Loss of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, and on the basis of the books and records of the company as we considered appropriate and according to the information and explanation give to us, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

(c) The Balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet and the Statement of Profit and Loss dealt by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read Note No 8 no provision made for doubtful Debts and together with the Significant Accounting Policies and other notes thereon gives 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 affair of the company as at 31st March, 2012;

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

(c) in the case of the Cash Flow Statement of the cash flow of the company for the year ended on that date

Annexure referred to in paragraph 3 of the Auditor's Report of even date to the members of MERCURY METALS on the financial statement for the year ended 2012.

1 The Company has maintained proper records of fixed assets showing full particulars including quantitative details and location. The company has a regular programmed 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 programmed, certain fixed assets were physically verified by Management during the year and no material discrepancies were noticed on such verification.During the company has disposed off fixed assets held by the company.

2 As explained to us, the inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and the nature of its business.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 the business.The company has maintained proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of the having regard to the size of the operations of the Company.

3 We are informed that the Company has not taken any loans, secured or unsecured, from/to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.There was outstanding balance of ' 16600 granted to a company listed in the register maintained us 301. During the year said balance was written off.

4 In our opinion, and according to the information and explanation given to us, there are adequate internal control procedures 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. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weakness in internal control.

5 In our opinion and according to the information and explanations given to us, there is no transaction 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 ' 500000 or more in respect of any party.

6 The Company has not accepted any deposits from the public hence provision required Us 58A & 58AA are not applicable.

7 In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

8 The Central Government has not prescribed maintenance of cost Records under Section 209 (1) (d) of the Companies Act, 1956.

9 According to the information and explanations given to us, there are no undisputed statutory dues payable respect of Provident Fund, Investor Education and Protection Fund, Employees state Insurance, Income-tax Sales-tax, Wealth Tax, Custom Duty, Excise duty, cess which are outstanding as at 31st March,2012 for a period of more than six months from the date they became payable except C.S.T. ' 4,74,582 Lacs , sales tax outstanding ' 10658, which was written off during the year.

10 Company has registered for a period not less than five year, its accumulated losses at the end of the financial year ' 17,34,53,425.15 and during previous year, it was ' 155289782.14.

11 The company has rearrange in OTS scheme of the the secured loan payable to Charotar Nagarik Sahakari Bank Ltd. Which was default in previous year.

12 The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and in our opinion, adequate documents and records are not required to maintained.

13 The company is not chit Fund, Nidhi and Mutual Fund society; hence requirements of item (Xiii) of paragraph 4 of the order are not applicable to the company.

14 According to the information and explanations given to us, proper records have been maintained in respect of transactions and contracts, in shares, securities, debentures and other investments and timely entries have been made therein. The shares and other securities have been held by the company in its own name.

15 According to the information and explanations given to us, the company has given guarantee for loans taken by Rupangi Impex Ltd.(company under liquidation) amounting to ' 738 Lacs from bank or financial institutions.

16 The company has not taken any term loans and hence requirement of reporting regarding application of term loans does not arise.

17 No short term loan was applied for long term investment.

18 We are informed that the company has not made any preferential allotment of shares to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

19 The company has not issued debentures and hence requirement of reporting regarding creation of securities in respect of debentures issued does not arise.

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

21 According to information and explanation given to us no fraud on or by the company has been noticed or reported during the course of audit.

For, Badrilal Punglia & Co.

Chartered Accountant

B. L. Punglia

Proprietor

Membership No. : 034230

Place : Ahmedabad FRN. : 100827W

Date : 13/08/2012 PAN : AEHPP2017D

 
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