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Auditor Report of Nagpur Power & Industries Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of NAGPUR POWER AND INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Profit and Loss Statement and Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

3. 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 there under.

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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, but not for the purpose of expressing an opinion on whether the Company has in the place an adequate internal financial control system over financial reporting and the operating effectiveness of the such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

4. Attention is invited to Note 14.1 viz company's Ferro Alloys unit at Khandelwal Nagar, Kanhan, Nagpur generated waste during the process of manufacture, which has accumulated over the years in and around the main plant. The waste is reuseable for extracting metal content therein the Company has not accounted for Stock of balance of such accumulated waste over the years at its unit as the technical consultants have advised the company that its quality, metal content and the realizable value cannot be reasonably ascertained. Our audit report for the previous year was also similarly qualified.

Qualified Opinion

5. In our opinion and to the best of our information and according to the explanations given to us, except for the consequential effect of the matter described in the Basis for Qualified Opinion paragraph above which is not quantifiable, 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 the affairs of the Company as at March 31, 2015, and its loss and its cash flows for the year ended on that date.

Report On Other Legal and Regulatory Requirements

6. 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.

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

a. We have sought and, except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, 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. Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have adverse effect on the functioning of the Company.

f. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act.

g. 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 litigation on its financial position in its financial statements – Refer Note 25 to the financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 6 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Nagpur Power and Industries Limited on the standalone financial statements for the year ended 31st March 2015.

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

(b) As explained to us, the fixed assets have been physically verified by the management during the year in accordance with a phased programme of verification which, in our opinion, is reasonable having regard to the size of the company and nature of its fixed assets. The discrepancies noticed on verification between the physical fixed assets and the book records were not material having regard to the size of the operations of the Company and the same have been properly dealt with in books of account.

(ii) (a) 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.

(b) In our opinion and according to the information and explanation given to us, except in respect of stock of accumulated waste referred to in the Basis for Qualified Opinion paragraph 4 of our report, and Note 14.1 of the accompanying financial statement, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and the same have been properly dealt with in books of account.

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firm or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 ("the Act):

(a) During the year, the Company has granted loans to one party covered in the register maintained under section 189 of the Companies Act, 2013 ("the Act).

(b) According to the information and explanations given to us, there is no overdue of principal amount of loan granted to these Companies listed in the register maintained under section 189 of the companies Act, 2013.The payment of interest is irregular on Interest on the loan.

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

(v) The Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

(vi) According to the information and explanations given to us, the maintenance of cost records was not prescribed by the Central Government under section 148(1) of the Act, for any of the activities of the Company.

(vii) (a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues, applicable to it, with appropriate authorities.

(b) According to the information and explanations given to us no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues, applicable to it, were in arrears, as at 31st March, 2015 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, the following dues of sales tax, duty of customs, duty of excise, income tax have not been deposited with the appropriate authorities on account of dispute;

Name of the Statute Nature of dues Amount (Rs. in lacs)

West Bangal Sales tax Act, 1957 Sales tax demand of 2.43

- Sales tax Case at Calcutta. three Asst. Years Calcutta.

Uttar Pradesh Sales Tax Act, Sales tax demand for 3.33 1957 - Sales tax case at Kanpur. the Asst. Year 1980-81

B.S.T Act, 1959 B.S.T & C.S.T 195.45 Central Excise Act, 1944, Excise Duty Case 26.58 Customs Act, 1962 & Finance Act, 1994 Duty case at Nagpur.

Customs Act, 1962 Customs and 117.43 Advalorem Duty

The Bombay Stamp Act, 1958 Stamp duty 45.83

Other statutory dues Entry tax 4.58

The Income Tax Act, 1961 Income tax demand under 18.05 section 156 for the Asst. Year 2010-11

Income Tax Act, 1961 Income Tax demand 3.32

TOTAL 417.00



Name of the statute Forum where dispute is pending

West Bangal Sales tax Act, 1957 Commissioner of - Sales tax Case at Calcutta. Sales Tax (Appeal) Calcutta.

Uttar Pradesh Sales Tax Act, Commissioner of 1957- Sales tax case at Kanpur. Sales Tax (Appeal) Kanpur.

B.S.T Act, 1959 JT. Commissioner of sales tax (Appeals), Nagpur

Central Excise Act, 1944, Commissioner of Customs Customs Act, 1962 & Finance Act, & Central Exice (Appeals), Nagpur. 1994 Duty case at Nagpur.

Customs Act, 1962 Commissioner of Customs (E.P.) and Directorate General of Foreign Trade (DGFT)

The Bombay Stamp Act, 1958 Supreme Court of India

Other statutory dues Tahsildar

The Income Tax Act, 1961 Income Tax Appellat (Tribunal).

Income Tax Act, 1961 Commissioner of Income Tax (Appeal) Mumbai

TOTAL

(d) There were no amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under by the Company.

(viii) The Company does not have accumulated losses at the end of the financial year, it has incurred cash loss of Rs, 89,11,124- during the financial year covered by our audit and Rs, 54,92,934/- in immediately preceding financial year.

(ix) According to the information and explanations given to us and the reucords made available to us, the Company has not defaulted in repayment of dues to any financial institution, banks or debenture holders during the year.

(x) The Company has given guarantee of Rs, 1371.75 lacs to a Bank for working capital facilities to the Subsidiary company. According to the information and explanations given to us, in our opinion the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

(xi) According to the information and explanations given to us and the records made available to us, the Company has not raised any term loan during the financial year.

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

For M.V. GHELANI & CO.

CHARTERED ACCOUNTANTS

Firm Regn. No. 119077W

(M. V. GHELANI)

Place : Mumbai PROPRIETOR

Date : May 28, 2015 Membership No.: 031105


Mar 31, 2014

1. We have audited the accompanying financial statements of NAGPUR POWER AND INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31,2014, 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, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. 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 flow 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 Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. 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.

4. 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 internel. 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.

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

Basis for Qualified Opinion

6. Attention is invited to Note 14.1 viz company''s Ferro Alloys unit generated waste during the process of manufacture, which has accumulated over the years in and around the main plant. The Company has not accounted for Stock of balance of accumulated waste over the years at its unit at Khandelwal Nagar, Kanhan, Nagpur as in the opinion of the company its quality, metal content and the realizable value can not be yet reasonably ascertained. Our audit report for the previous year was also similarly qualified.

Qualified Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, except for the consequential effect of the matter described in the Basis for Qualified Opinion paragraph above which is not quantifiable, 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 Statement of Profit and Loss, 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 flow for the year ended on that date.

Report On Other Legal and Regulatory Requirements

8. 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.

9. 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 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of 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 INDEPENDENT AUDITOR''S REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2014

Annexure referred to in paragraph 8 under the heading "Report on Legal and Regulatory Requirements" of our report of even date to the members of Nagpur Power And Industries Limited on the financial statements for the year ended 31st March, 2014.

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

(b) As explained to us, the fixed assets have been physically verified by the management during the year in accordance with a phased programme of verification which, in our opinion, is reasonable having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has disposed off certain assets. It has not affected the going concern status of the company.

ii. (a) The inventory has been physically verified by the management during the year and in our opinion, the frequency of such verification is reasonable.

(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 according to the information and explanation given to us, except and respect of stock of accumulated waste referred to in the Basis for Qualified Opinion of this report, Note 14.1 of the financial statement, the Company is maintaining proper records of inventory.The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and the same have been properly dealt with in books of accounts.

iii. In respect of loans / advances, secured or unsecured, granted or taken by the Company to/ from companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) During the year, the Company has not taken loan/advances from any party listed in the register maintained under section 301 of the Companies Act, 1956.

During the year, the Company has granted loan/advance to two parties covered in the register maintained under section 301 of the Companies Act, 1956, the maximum amount involved during the year was '' 31,820,258/- and their outstanding at the year end is '' 31,500,000/-

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company.

(c) According to the information and explanations given to us, there is no overdue amount of loan granted to these Companies listed in the register maintained under section 301 of the companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, prima facie there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of audit, we have not observed any weakness in internal controls.

v. (a) According to the information and explanations provided by the management to us, we are of the opinion that the

transactions that need to be entered into the register maintained under 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, transactions made in pursuance of any contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding Rupees Five lacs in respect of any party during the year have been made at prices which appear reasonable having regard to the prevailing market prices at the relevant time as per information available with the company.

vi. The Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder.

vii. The Company does not have an Internal Audit System commensurate with the size of the Company & nature of its business.

viii. According to the information and explanations given to us, the maintenance of cost records was not prescribed by the Central Government under section 209(1)(d) of the Act for any of the activities of the Company.

ix. (a) The Company is generally regular in depositing with appropriate authorities, Provident Fund, ESIC and other undisputed statutory dues including Income Tax, sales Tax, Wealth Tax, Custom Duty, Service Tax, Excise Duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, sales Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other statutory dues were in arrears, as at 31st March, 2014 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, the following dues of sales tax, customs duty, excise duty, have not been deposited with the appropriate authorities on account of disputes;

Name of the Nature of dues Amount Forum where dispute Statute (Rs. in is Pending lacs)

West Bangal Sales tax 2.43 Commissioner of Sales Sales tax Act, Tax Calcutta. 1957 -Sales tax Case at Calcutta.

Uttar Pradesh Sales tax 3.33 Commissioner of Sales Sales Tax Act, Tax Kanpur. 1957- Sales tax case at Kanpur.

B.S.T Act, 1959 Sales Tax & 195.45 JT. Commissioner of Central Sales sales tax (Appeals), Tax Nagpur

Central Excise Excise Duty 26.58 Commissioner of Customs Act 1944, & Central Exice Customs Act, (Appeals), Nagpur. 1962 & Finance Act, 1994 Duty case at Nagpur.

Customs Act, Customs and 117.43 Commissioner of Customs 1962 Advalorem Duty (E.P.) and Directorate General of Foreign Trade (DGFT)

The Bombay Stamp duty 45.83 Supreme Court of India Stamp Act, 1958

The Income Tax Income tax 36.32 Commissioner of Income Act, 1961 demand under Tax (Appeal) Mumbai. section 156 for the Asst. Year 2010-11

Other statutory Entry tax 4.58 Tahsildar dues

TOTAL 431.95

x The Company does not have accumulated losses at the end of the financial year, it has incurred cash loss of '' 5,234,769/- during the financial year covered by our audit. The Company had not incurred cash loss during the immediately preceding financial year.

xi. According to the information and explanations given to us and the records made available to us, the Company has not defaulted in repayment of dues to any financial institution, banks or debenture holders during the year.

xii. According to the information and explanations given to us and the records made available 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

xii. According to the information and explanations given to us and the records made available to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

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

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

xvi. According to the information and explanations given to us and the records made available to us, the Company has applied the term loans for the purpose for which they were obtained during the period covered by our audit report.

xvii. According to the information and explanations given to us and the records made available to us, the Company has not used any funds raised on short-term basis for long-term investment and vice versa during the period covered by our audit report.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

xix. According to the information and explanations given to us and the records made available to us, the Company has not issued any debentures during the period covered by our audit report.

xx. According to the information and explanations given to us and the records made available to us, the Company has not raised any money by public issue during the period covered by our audit report.

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

For M. V. GHELANI & CO. CHARTERED ACCOUNTANTS Firm Regn. No. 119077W

(M. V. GHELANI) PROPRIETOR Membership No.: 031105

Place : Mumbai Date: May 28, 2014


Mar 31, 2012

1. We have audited the attached. Balance Sheet of NAGPUR POWER & INDUSTRIES LIMITED as at 31st March 2012 and the Profit and Loss statement 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.

2 We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement(s). 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 th$ overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government vide notification No G.S.R. 480(E) dated 12th June 2003 in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 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 paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

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

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

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

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

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

(vi) Reference is invited to Note 13.1 viz. the Company has not accounted for Stock of balance of accumulated waste over the years at its unit at Khandelwal Nagar, Kanhan, Nagpur as in the opinion of the company its quality, metal content and the realizable value cannot be yet reasonably ascertained.

(vii) And subject to our comments in Paragraph 4(vi) above the effect whereof on the accounts is not ascertainable,

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

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

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

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

ANNEXURE TO THE AUDITOR'S REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2012

Annexure referred to in paragraph 3 of our report of even date to the members of Nagpur Power & Industries Limited on the financial statements for the year ended 31st March 2012.

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

(b) As explained to us, the fixed assets have been physically verified by the management during the year in accordance with a phased programme of verification which, in our opinion, is reasonable having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has disposed off certain assets. It has not affected the going concern status of the company.

2 (a) The inventory has been physically verified by the management during the year and in our opinion, the frequency of such verification is reasonable.

(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 according to the information and explanation given to us, except in respect of stock of accumulated waste referred to in Note 13.1, the Company is maintaining proper records of inventory.

The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and the same have been properly dealt with in books of accounts.

3 In respect of loans / advances, secured or unsecured granted or taken by the Company to/ from companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) During the year, the Company has not taken loan/advances from any party listed in the register maintained under section 301 of the Companies Act, 1956.

During the year, the Company has granted loan/advance to one party covered in the register maintained under section 301 of the Companies Act, 1956, the maximum amount involved during the year was Rs. 6,68,113 and their outstanding at the year end is Rs. NIL.

(b) According to the information and explanations given to us, the loan/advance is interest free. In our opinion, other terms and conditions are not prima facie, prejudicial to the interest of the Company.

(c) According to the information and explanations given to us, there is no overdue amount of loan granted to these Companies listed 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, prima facie there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of audit, we have not observed any weakness in internal controls.

5 (a) According to the information and explanations provided by the management to us, we are of the opinion that the transactions that heed to be entered into the register maintained under 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, transactions made in pursuance of any contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding Rs. Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6 The Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder.

7 The Company does not have an Internal Audit System commensurate with the size and nature of its business.

8 According to the information and explanations given to us, the maintenance of cost records was not prescribed by the Central Government under section 209(1)(d) of the Act for any of the activities of the Company.

9 (a) The Company is generally regular in depositing with appropriate authorities, Provident Fund, ESIC and other undisputed statutory dues including Income Tax, sales Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income Tax, sales Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other statutory dues were in arrears, as at 31st March, 2012 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, the following dues of sales tax, customs duty and excise duty have not been deposited with the appropriate authorities on account of dispute;

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

West Bangal Sales tax Act, 1957 Sales tax demand of 2.43 Commissioner of - Sales tax Case at Calcutta. three Asst. Years Sales Tax (Appeal) Calcutta.

Uttar Pradesh Sales Tax Act, Sales tax demand for 3.33 Commissioner of 1957-Sales tax case at Kanpur. the Asst. Year 1980-81 Sales Tax (Appeal) Kanpur.

B.S.TAct, 1959 B.S.T & C.S.T 195.45 JT. Commissioner of sales tax (Appeals), Nagpur

Central Excise Act, 1944, Excise Duty 26.58 Commissioner of Customs Customs Act, 1962 & Finance Act, & Central Exice (Appeals), Nagpur. 1994 Duty case at Nagpur.

Customs Act, 1962 , Customs and 117.43 Commissioner of Customs (E.P.) and Advalorem Duty Directorate General of Foreign Trade (DGFT)

The Bombay Stamp Act, 1958 Starfip duty 45.83 Supreme Court of India

Other statutory dues Entry tax 4.58 Tahsildar

TOTAL 395.63

10 The accumulated losses of the company at the end of the financial year is less than fifty percent of its net worth, it has incurred cash loss of Rs. 2,61,236/- during the financial year covered by our audit. No cash loss has been incurred in the immediately proceeding financial year.

11 According to the information and explanations given to us and the records made available to us, the Company has not defaulted in repayment of dues to any financial institution, banks or debenture holders during the year.

12 According to the information and explanations given to us and the records made available 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

13 According to the information and explanations given to us and the records made available to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

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

16 According to the information and explanations given to us and the records made available to us, term loan obtained (being car loan) was applied for the purpose for which the loan was obtained.

17 According to the information and explanations given to us and the records made available to us, the Company has not used any funds rajsed on short-term basis for long-term investment and vice versa during the period covered by our audit report.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

19 According to the information and explanations given to us and the records made available to us, the Company has not issued any debentures during the period covered by our audit report.

20 According to the information and explanations given to us and the records made available to us, the Company has not raised any money by public issue during the period covered by our audit report.

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

For M. V. GHELANI & CO.

CHARTERED ACCOUNTANTS

Firm Regn. No. 119077W

(M. V. GHELANI)

Place : Mumbai PROPRIETOR

Date : 28th May, 2012 Membership No.: 031105


Mar 31, 2010

1. We have audited the attached Balance Sheet of NAGPUR POWER & INDUSTRIES LIMITED as at 31st March 2010 and the Profit and 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 based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement(s). 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.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government vide notification No G.S.R. 480(E) dated 12th June 2003 in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 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 paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

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

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

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

(vi) Reference is invited to Schedule 19 note (ii) viz. the Company has not accounted for Stocks of such balance waste accumulated over the years at its unit at Khandelwal Nagar, Kanhan, Nagpur as in the opinion of the Management its quality, unextracted metal content therein and the realisable value is not ascertainable.

(vii) And subject to thecomments in Paragraph 4(vi) above the effect whereof on the accounts is not ascertainable, In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the accounting policies and other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

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

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

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

ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010

Annexure referred to in paragraph 3 of our report of even date to the members of Nagpur Power & Industries Limited on the financial statements for the year ended 31st March 2010.

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

(b) As explained to us, the fixed assets have been physically verified by the management during the year in accordance with a phased programme of verification which, in our opinion, is reasonable having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such verification.

(c) Reference is invited to schedule 4 Fixed Assets note (b) and schedule 19 note (xiv) on the sale of assets forming substantial part of the Ferro Alloys business of the company for a price of Rs. 660 lacs. According to the information and explanations given to us, we are of the opinion that the sale of the said assets has not affected the going concern status of the company.

2 (a) The inventory has been physically verified by the management during the year and in our opinion, the frequency of such verification is reasonable.

(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 according to the information and explanation given to us, except in respect of stock of accumulated waste referred to in Schedule 19 Note (ii) the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and the same have been properly dealt with in books of accounts.

3 In respect of loans / advances, secured or unsecured granted or taken by the Company to/ from companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) During the year, the Company has not taken loan/advances from any party listed in the register maintained under section 301 of the Companies Act, 1956. During the year, the Company has granted loan/advance to one party covered in the register maintained under section 301 of the Companies Act, 1956, the maximum amount involved during the year was Rs. 92,483 and their outstanding at the year end is Rs. NIL.

(b) According to the information and explanations given to us, the loan/advance is interest free. In our opinion, other terms and conditions are not prima facie, prejudicial to the interest of the Company.

(c) According to the information and explanations given to us, there is no overdue amount of loan granted to these Companies listed 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, prima facie there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of audit, we have not observed any weakness in internal controls.

5 (a) According to the information and explanations provided by the management to us, we are of the opinion that the transactions that need to be entered into the register maintained under 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, transactions made in pursuance of any contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding Rs. Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6 The Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder.

7 The Company does not have any Internal Audit System commensurate with size of the Company and nature of its business.

8 According to the information and explanations given to us, the maintenance of cost records was not prescribed by the Central Government under section 209(1)(d) of the Act for any of the activities of the Company.

9 (a) The Company is generally regular in depositing with appropriate authorities, Provident Fund, ESIC and other

undisputed statutory dues including Income Tax, sales Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other material statutory dues applicable to it. (b) According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, sales Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other statutory dues were in arrears, as at 31st March, 2010 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, the following dues of sales tax, customs duty and excise duty have not been deposited with the appropriate authorities on account of dispute;

Name of the Statute Nature of dues Amount Forum where dispute is pending

(Rs. in lacs)

West Bangal Sales tax ct, 1957 Sales tax demand for the 2.43 Commissioner of Sales Tax (Appeal)

Sales tax Case at Calcutta. various Asst. Years Calcutta.

Uttar Pradesh Sales tax Act, 1957 Sales tax demand for the 3.33 Commissioner of Sales Tax (Appeal)

Sales tax Case at Kanpur. various Asst. Year 1980-81 Kanpur

Central Excise Act, 1944 Excise Duty 26.58 Commissioner of Customs & Central .

Customs Act, 1962 & Finance Act, Exice (Appeals), Nagpur

1994 Duty case at Nagpur.

Customs Act, 1962 Customs and 58.19 Commissioner of Customs (E. P.) and

Advalorem Duty Directorate General of Foreign Trade

(DGFT)

B.S.T Act, 1959 B.S.T & C.S.T 195.45 JT Commissioner of sales tax,

(Appeals), Nagpur

TOTAL Rs. 285.98

10 The Company does not have accumulated losses at the end of the financial year, it has not incurred any cash loss during the financial year covered by our audit and the immediately proceeding financial year.

11 According to the information and explanations given to us and the records made available to us, the Company has not defaulted in repayment of dues to any financial institution, banks or debenture holders during the year.

12 According to the information and explanations given to us and the records made available 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

13 According to the information and explanations given to us and the records made available to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

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

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

16 According to the information and explanations given to us and the records made available to us, the Company has not obtained any term loans during the period covered by our audit report.

17 According to the information and explanations given to us and the records made available to us, the Company has not used any funds raised on short-term basis for long-term investment and vice versa during the period covered by our audit report.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

19 According to the information and explanations given to us and the records made available to us, the Company has not issued any debentures during the period covered by our audit report.

20 According to the information and explanations given to us and the records made available to us, the Company has not raised any money by public issue during the period covered by our audit report.

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



For M.V. GHELANI & CO

CHARTERED ACCOUNTANTS

(M. V. GHELANI)

PROPRIETOR

Place : Mumbai

Dated : 28th May, 2010


Mar 31, 2000

We have audited the attached Balance Sheet of NAGPUR POWER & INDUSTRIES LIMITED as at 31st March, 2000 and the Profit and Loss Account for the period from 01-10-1999 to 31-03-2000, annexed thereto, and report that :

1. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

2. Further to our comments in the annexure referred to in paragraph (1) above :

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) Proper books of account as required by law have been kept by the Company so far as appears from our examination of the books;

c) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report are in compliance with the Ac- counting Standards referred to in Section 211 (3c) of the Companies Act, 1956 are in agreement with the books of accounts;

d) As mentioned in Note (ii) the Company has not provided by debit to power and fuel account full bills raised by the Maharashtra State Electricity Board

(MSEB) as the management is of the view that MSEB has wrongly calculated the tariff on contracted maximum demand instead of on recorded demand. The amount not provided is Rs 10.67 crores (including Rs 8.33 crores upto last period). This amount is treated by the Company as an item of contingent liability (note iiib). Had the amount been booked the operating loss for the period would have increased by Rs 2.34 crores and the total loss would have increased by Rs 10.67 crores and the general reserve would have been reduced to that extent.

3. Subject to the matters referred to in para (d) above, in our opinion and according to the explanations given to us, the said accounts give 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 31 st March, 2000; and

ii) In the case of the Profit and Loss Account, of the Loss of the Company for the period from 1 October, 1999 to 31 March, 2000.

Annexure to Auditors Report (Referred to in Paragraph (1) of our Report of even date).

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets (excluding furniture and fixtures and equipments where only groupwise costs are recorded). We are informed that physical verification of the fixed assets has been carried out during the period. To the best of our knowledge no material discrepancies have been noticed on verifica- tion.

2. As per the Scheme of Arrangement approved by Honble High Court at Mumbai the value of the fixed assets have been revalued based on the market value as certified by Chartered Engineers and Government approved valuers.

3. The stocks of finished goods, spare parts and raw materials have been physically verified by the Management at the end of the financial period. In our opinion, the frequency of the verification is reasonable.

4. In our opinion and according to the information and explanations given to us, the procedures of verification of stocks followed by the man- agement are reasonable and adequate in relation to the size of the Company and the nature of its business.

5. The discrepancies noticed between the physi- cal verified stocks and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

6. In our opinion and on the basis of our examination of the stock records, the valuation of stocks is fair and proper in accordance with the generally accepted accounting principles. The valuation is as per the change indicated in note (v) of Schedule 19. Further excise duty

payable on finished goods lying in bonded ware houses is included in the value of finished goods, in terms of Accounting Standard 2 (AS- 2) which however has no impact on the loss for the period 1 st October, 1999 to 31 st March, 2000 and on Reserves as at 31 st March, 2000.

7. The Company has not taken any loans secured or unsecured from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. We are informed that there are no companies under the same management within the mean- ing of Section 370 (1B) of the Companies Act, 1956.

8. The terms and conditions of loans granted to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, are in our opinion prima facie not prejudicial to the interests of the Company. There are no companies under the same management within the meaning of Section 370(1-B) of the Companies Act, 1956.

9. In respect of loans and advances given to employees, the principal amounts are gener- ally being repaid as stipulated.

10. In our opinion and according to the information and explanations given to us, there are ad- equate internal control procedures commensu- rate with the size of the Company and the nature of its business with regard to the purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

11. In our opinion and according to the information and explanations given to us, the transactions of purchase of goods and materials and sale of goods, materials and services made in usance of contracts or arrangements entered in the Register maintained under Section 301

of the Companies Act, 1956 and aggregating during the year to Rs. 50,000/- or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services, where such market prices are available with the Company or the prices at which transactions for similar goods or materials or services have been made with other parties.

12. As explained to us, unserviceable or damaged stores, raw materials and finished goods are determined by the Company.

13. The Company has complied with the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to deposits accepted from the public.

14. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of by-products and scrap.

15. The Company does not have an internal audit system Comensurate with the size and nature of its business.

16. The Central Goverment has not prescribed maintenance of cost records under section 209 (1)(d) of the Companies Act 1956 for any of the products of the Company.

17. According to the records or the Company, Provident Fund and Employees Sate Insur- ance dues have generally been deposited regularly during the perod with the appropriate authorities.

18. According to the information and explanations given to us, there were no undisputed amounts payable in respect of income tax, wealth tax, sales-tax, custom duty and excise duty which have remained outstanding as at 31st March, 2000 for a period of more than six months from the date they became payable.

19. According to the information and explanations given to us and the records examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practice.

20. The Company is not a sick industrial company within the meaning of clause (o) of Sub-section (1) of Section 3 of the Sick Industrial Compa- nies (Special Provisions) Act, 1985. Attention is invited to point 1(d) of the report.

21. In respect of the Companys trading activity, we are informed that there are no damaged stocks.

For S B BILLIMORIA & CO. Chartered Accountants

S J MERCHANT Partner

Place : MUMBAI Date : 28th July, 2000.

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