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Auditor Report of Midwest Gold Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of the 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.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flow for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 it appears from our examination of those books;

c) the balance sheet, statement of profit and loss and cash flow statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) on the basis of the written representations received from the directors as on 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; and

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

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

ii. the company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

Annexure to the Independent Auditors' Report

The Annexure referred to in our independent Auditors' report to the members of the company on the standalone financial statements for the year ended 31 March 2015, we report that:

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

(b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

2 a) The inventories 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 explanation 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 and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of account.

3 According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to and from companies, firms and other parties covered in the register maintained under section 189 of the Companies Act.

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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control.

5 The Company has not accepted any deposits from the public during the year under consideration.

6 The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the activities rendered by the Company.

7 According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2015 for a period of more than six months from the date on which they become payable.

8 The accumulated loss of Rs. 8,91,03,261/- at the end of the financial year are more than 50% of its net worth. The Company has incurred cash loss of Rs. 32,54,909/- during the financial year covered by our audit and incurred cash loss in the immediately preceding financial year of Rs. 53,45,889.

9 The Company did not have any outstanding dues to financial institutions, banks or debenture holders during the year.

10 In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or Financial Institutions are not prejudicial to the interest of the Company.

11 The Company did not have any term loans outstanding during the year.

12 To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For G.L.KOTHARI & Co., CHARTEsRED ACCOUNTANTS

G.L.KOTHARI PLACE : Bangalore PROPRIETOR DATE : 30.05.2015 M. No. 25481 (Firm Registration No. 001445 S)


Mar 31, 2014

We have audited the accompanying financial statements of MIDWEST GOLD LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 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

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 notified under the companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

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, 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 flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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 notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

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

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure to the Auditors'' Report

Referred to in paragraph 1 of our report

1. In respect of Fixed Assets:

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

(b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

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

2. In respect of Inventories:

(a) The inventories 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 explanation 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 and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the company

has not granted any loans, secured or unsecured to and from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act,1956.

(b) According to the information and explanations given to us, the company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, we are of the opinion that the transaction that need to be entered in the register maintained u/s 301 of the Companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year made in pursuance of the contract or arrangements with the parties referred to in (a) above, and exceeding the value of Rs. 5.00 Lakhs in each case. The rates charged / paid were not comparable as no such transaction were made with any other party for such material.

6. In our opinion and according to the information and as per the explanations given to us, the Company has not accepted deposits from the public during the year under consideration and the Company Law Board has not passed any orders against the Company for any contravention under Sections 58A & 58AA of the Companies Act.

7. In our opinion, the Company does not have an internal audit system commensurate with the size and the nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to clause (d) of sub-section (1) of section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained and are being made up. We have not, however, made detailed examination of the records with a view to determine whether they are accurate or complete.

9. According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employee''s State Insurance, Income tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2014 for a period of more than six months from the date on which they become payable.

10. According to the records of the Company, Income tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty and cess, which have not been deposited on account of dispute, are given below.

Nature of the Amount Unpaid Year to which Forum where Statute (Rs. In Lakhs) it relates dispute is pending.

Custom Duty 15.01 2001-2002 Directorate General of Central Excise Intelligence.

11. The accumulated losses at the end of the financial year are more than 100% of its net worth. The Company has incurred cash loss of Rs. 53,45,889/- during the current financial year 2013-14. The Company''s total capital is Rs. 3,27,00,000/- against total accumulated losses of Rs. 7,14,78,838/-

12. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks.

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

14. In our opinion and according to the information and as per the explanations given to us, the provisions of any special statute applicable to chit funds are not applicable to the Company.

15. In our opinion and according to the information and as per the explanations given to us, the Company is not dealing in or trading in Shares, Securities, debentures and other investment.

16. In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or Financial Institutions are not prejudicial to the interest of the Company.

17. In our opinion and to the best of our information and as per the records of the Company, the Company had not borrowed any Term Loans during the year under consideration.

18. According to the Cash flow statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis, prima facie, not been used during the year for long term investment and vice versa.

19. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained U/s 301 of the Companies Act, 1956.

20. The Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

21. The Company has not made any Public issues during the year and therefore the question of disclosing the end use of money does not arise.

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

For G.L.KOTHARI & Co., CHARTERED ACCOUNTANTS (Registration No.001445S)

PLACE : Bangalore G.L.KOTHARI DATE : 30.05.2014 PROPRIETOR M. No. 25481


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of MIDWEST GOLD LIMITED ("the Company"), 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 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

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 Profit and Loss Account, of the Profit for the year ended on that date; and

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

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, 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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Referred to in paragraph 1 of our report

1. In respect of Fixed Assets :

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

(b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion frequency of verification is not reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. However, necessary records in support of the said statement have not been made available to us.

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

2. In respect of Inventories:

(a) The inventories 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 explanation 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 and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to and from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act,1956.

(b) According to the information and explanations given to us, the company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, we are of the opinion that the transaction that need to be entered in the register maintained u/s 301 of the Companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year made in pursuance of the contract or arrangements with the parties referred to in (a) above, and exceeding the value of Rs. 5.00 Lakhs in each case. The rates charged / paid were not comparable as no such transaction were made with any other party for such material.

6. In our opinion and according to the information and as per the explanations given to us, the Company has not accepted deposits from the public during the year under consideration and the Company Law Board has not passed any orders against the Company for any contravention under Sections 58A & 58AA of the Companies Act.

7. In our opinion, the Company does not have an internal audit system commensurate with the size and the nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to clause (d) of sub-section (1) of section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained and are being made up. We have not, however, made detailed examination of the records with a view to determine whether they are accurate or complete.

9. According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employee''s State Insurance, Income tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2013 for a period of more than six months from the date on which they become payable.

10. According to the records of the Company, Income tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty and cess, which have not been deposited on account of dispute, are given below.

Nature of the Amount Year to Forum where dispute is pending. Statute Unpaid which it relates (Rs. In Lakhs)

Custom Duty 15.01 2001-2002 Directorate General of Central Excise Intelligence.

11. The accumulated losses at the end of the financial year are more than 100% of its net worth. The Company has not incurred cash loss during the current financial year 2012-13. The Company total capital is Rs. 3,27,00,000/- against total accumulated losses of Rs.6,73,94,209/- 12. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks.

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

14. In our opinion and according to the information and as per the explanations given to us, the provisions of any special statute applicable to chit funds are not applicable to the Company.

15. In our opinion and according to the information and as per the explanations given to us, the Company is not dealing in or trading in Shares, Securities, debentures and other investment.

16. In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or Financial Institutions are not prejudicial to the interest of the Company.

17. In our opinion and to the best of our information and as per the records of the Company, the Company had not borrowed any Term Loans during the year under consideration.

18. According to the Cash flow statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis, prima facie, not been used during the year for long term investment and vice versa.

19. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained U/s 301 of the Companies Act, 1956.

20. The Company has not issued any debentured during the year and therefore the question of creating security in respect there of does not arise.

21. The Company has not made any Public issues during the year and therefore the question of disclosing the end use of money does not arise.

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



For G.L.KOTHARI & Co.,

CHARTERED ACCOUNTANTS

( Registration No.001445 S)

Sd/-

G.L.KOTHARI

PLACE : Bangalore PROPRIETOR

DATE : 30/05/2013 M. No. 25481


Mar 31, 2012

We have audited the attached Balance sheet of MIDWEST GOLD LIMITED (formerly NOVA GRANITES (INDIA) LIMITED) as at 31st March 2012 and also the Profit & Loss account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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.

We report as follows:

1. 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 paragraph 4 & 5 of the said order.

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

a. We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our Audit.

b. In our opinion, the Company has kept proper books of accounts as required by Law so far as appears from our examination of such books.

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

d. In our Opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this Report comply with the Accounting Standards referred to in Sub-Section (3C] of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from all the Directors of the Company as on March 31,2012 and taken on record by the Board of Directors, we report that none of the Directors of the company are disqualified from being appointed as Directors of the Company under clause (g) of sub-section (1) of section 274 of Companies Act, 1956,

f. The Company's rehabilitation scheme has been approved by the BIFR and the implementation of the same has been done. Accordingly, these accounts have been prepared under going concern assumption. We have relied upon management assessment on such assumption.

g. Subject to the foregoing, in our opinion and to the best of our information & according to the explanation given to us, the said accounts read with the schedule to the notes (Schedule -"1 & 2") give the information required by the Companies Act, 1956 in the manner so required and give a true & 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 & Loss Account, of the Loss for the year ended on that date: and

c. In the case of Cash Flow Statement, of the cash Flows for the year ended on that date.

Referred to in paragraph 1 of our report

1. In respect of Fixed Assets:

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

(b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion frequency of verification is not reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. However, necessary records in support of the said statement have not been made available to us.

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

2. In respect of Inventories:

(a) The inventories 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 explanation 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 and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of account.

3. [a] According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to and from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) According to the information and explanations given to us, the company has not taken any loans secured or unsecured loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, we are of the opinion that the transaction that need to be entered in the register maintained u/s 301 of the Companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year made in pursuance of the contract or arrangements with the parties referred to in [a] above, and exceeding the value of Rs. 5.00 Lakhs in each case. The rates charged / paid were not comparable as no such transaction was made with any other party for such material.

6. In our opinion and according to the information and as per the explanations given to us, the Company has not accepted deposits from the public during the year under consideration and the Company Law Board has not passed any orders against the Company for any contravention under Sections 58A & 58AA of the Companies Act.

7. In our opinion, the Company does not have an internal audit system commensurate with the size and the nature of its business.

8. As informed to us, in respect of this Company, maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956.

9. According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Income tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31,2012 for a period of more than six months from the date on which they become payable.

10. According to the records of the Company, Income tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty and cess, which have not been deposited on account of dispute, are given below.

Nature of the Amount Unpaid Year to which Forum where dispute is pending Statute (Rs. In Lakhs) it relates

Directorate Genera] of Custom Duty 15.01 2001-2002 Central Excise Intelligence.

11. The accumulated losses at the end of the financial year are more than 100% of its net worth. The Company has incurred cash loss during the current financial year 2011-12. The Company total capital is Rs. 3,27,00,000/- against total accumulated losses ofRs. 6,80,13,720/-.

12. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks.

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

14. In our opinion and according to the information and as per the explanations given to us, the provisions of any special statute applicable to chit funds are not applicable to the Company.

15. In our opinion and according to the information and as per the explanations given to us, the Company is not dealing in or trading in Shares, Securities, debentures and other investment.

16. In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or Financial Institutions are not prejudicial to the interest of the Company.

17. In our opinion and to the best of our information and as per the records of the Company, the Company had not borrowed any Term Loans during the year under consideration.

18. According to the Cash flow statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis, prima facie, not been used during the year for long term investment and vice versa.

19. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained U/s 301 of the Companies Act, 1956.

20. The Company has not issued any debentures during the year and therefore the question of creating security in respect there of does not arise.

21. The Company has not made any Public issues during the year and therefore the question of disclosing the end use of money does not arise.

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

For G.L.KOTHARI & Co.,

CHARTERED ACCOUNTANTS

[Registration No.001445 S)

G. L. KOTHARI

PROPRIETOR

M. No. 25481

PLACE : Bangalore

DATE : 13/08/2012


Mar 31, 2009

We have audited the attached Balance sheet of NOVA GRANITES (INDIA) LIMITED as at 31st March 2009 and also the Profit & Loss account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements sased 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 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.

We report as follows)

1. As required by the Companies (Auditors 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 paragraph 4 & 5 of the said order.

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

a. We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our Audit.

b. In our cpinion, the Company has kept proper books of accounts as required by Law so far as appears from our examination of such books.

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

d. In our Opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this Report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from all the Directors of the Company as on March 31, 2009 and taken on record by the Board of Directors, we report that none of the Directors of the company are disqualified from being appointed as Directors of the Company under clause (g) of sub- section (1) of section 274 of Companies Act, 1956.

f. The Companys rehabilitation scheme has been approved by the BIFR and the implementation of the same has been done. Accordingly, these accounts have been prepared under going concern assumption. We have relied upon management assessment on such assumption.

g. Subject to the foregoing, in our opinion and to the best of our information & according to the explanation given to us, the said accounts read with the schedule to the notes (Schedule -"P") give the information required by the Companies Act, 1956 in the manner so required and give a true & 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, 2009

b. In the Case of the Profit & Loss Account, of the Loss for the year ended on that date: and

c. In the case of Cash Flow Statement, of the cash Flows for the year ended on that date.

Annexure to the Auditors Report Referred to in paragraph 1 of our report

1. In respect of Fixed Assets:

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

(b) A substantial portion of the fixed assets has been physically verified by the management during the year and in our opinion frequency of verification is not reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. However, necessary records in support of the said statement have not been made available to us.

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

2. In respect of Inventories:

(a) The inventories 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 explanation 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 and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the books of account were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to and from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) According to the information and explanations given to us, the company has not taken any laons, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, we are of the opinion that the transaction that need to be entered in the register maintained u/s 301 of the Companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions during the year made in pursuance of the contract or arrangements with the parties referred to in (a) above, and exceeding the value of Rs. 5.00 Lakhs in each case. The rates charged / paid were not comparable as no such transaction were made with any other party for such material.

6. In our opinion and according to the information and as per the explanations given to us, the Company has not accepted deposits from the public during the year under consideration and the Company Law Board has not passed any orders against the Company for any contravention under Sections 58A & 58AA of the Companies Act.

7. In our opinion, the Company does not have an internal audit system commensurate with the size and the nature of its business.

8. As informed to us, in respect of this Company, maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956.

9. According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2009 for a period of more than six months from the date on which they become payable.

10. According to the records of the Company, Income tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty and cess, which have not been deposited on account of dispute, are given below.

Nature of the Amount Year to Forum where dispute is pending Statute Unpaid which it
Custom Duty 15.01 2001-2002 Directorate General of Central Excise Intelligence.

11. The Company has accumulated losses of Rs. 1270.75 Lakhs as at 31st March 2009. The Company has incurred cash loss of Rs. 399.59 Lakhs during the financial year covered by our audit and Rs. -Nil- in the immediately preceding financial year.

12. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks.

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

14. In our opinion and according to the information and as per the explanations given to us, the provisions of any special statute applicable to chit funds are not applicable to the Company.

15. In our opinion and according to the information and as per the explanations given to us, the Company is not dealing in or trading in Shares, Securities, debentures and other investment.

16. In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or Financial Institutions are not prejudicial to the interest of the Company.

17. In our opinion and to the best of our information and as per the records of the Company, the Company had not borrowed any Term Loans during the year under consideration.

18. According to the Cash flow statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis, prima facie, not been used during the year for long term investment and vice versa.

19. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained U/s 301 of the Companies Act, 1956.

20. The Company has not issued any debentured during the year and therefore the question of creating security in respect there of does not arise.

21. The Company has not made any Public issues during the year and therefore the question of disclosing the end use of money does not arise.

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

For G.L.KOTHARI & Co., CHARTERED ACCOUNTANTS

Sd/- PLACE: Bangalore G.L.KOTHARI

DATE : 01/09/2009 PROPRIETOR

M. No. 25481

 
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