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Auditor Report of National Steel and Agro Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of NATIONAL STEEL AND AGRO INDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2015, the Profit and Loss Statement 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 Financial Statements

The Company's Board of Director is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes 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 judgements 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these 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 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessment, 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 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 audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and

give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its 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, 2015 issued by the Central Government of India in terms of Sub-Section (11) of Section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

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

e) On the basis of the written representations received from the Directors as on 31st March, 2015 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2015 from being appointed as a Director in terms of Section 164(2) of the Act.

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

(i) The Company has disclosed the impact of pending litigations as at 31st March, 2015 on its financial position in its financial statements as referred in annexure to Auditors' Report vii(b).

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts.

(iii) There has been no amounts, required to be transferred, to the investor Education and Protection Fund by the Company.

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

(b) The fixed assets have been physically verified by the management, in accordance with the programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its Assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.

(ii) (a) As explained to us, the inventory of the Company has been physically verified during the year by the management. In respect of materials lying with third parties these have been confirmed by them. In our opinion the frequency of the verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation of the size of the Company and the nature of its business.

(c) In our opinion and information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

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

(iv) In our opinion and according to the information and explanations given to us, there are adequate Internal Control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in Internal Controls.

(v) The Company has not accepted any deposits from the public within the meaning of Section 73 and 74 of the Act and the rules framed there under to the extent notified.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of Cost Records has been specified under Sub-Section (1) of Section 148 of the Companies Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us as at 31st March, 2015 there is disputed dues in respect of UP Entry Tax aggregating to 145.86 Lacs is pending before Hon'ble Supreme Court of India against the Joint Commissioner (Appeals), Commercial Tax, Ghaziabad related to the year 2008-09, 2009-10, 2010- 11 & 8.56 Lacs is pending before Sales Tax Department, Ghaziabad for the year 2010-11

under Vat, 8.58 Lacs is pending before Joint Commissioner of Sales Tax, Mumbai for the period 2010-11. Appeals related to excise are pending before the Commissioner (Appeals) Bhopal for 12.50 Lacs & 4.89 Lacs for the year 2013-14 & 2014-15 respectively. Further appeals are pending related to Entry Tax before M.P. Commercial Tax Appellate Board, Bhopal for 50.47 Lacs related to the year 2004-05 & appeals are pending for 5.20 Lacs & 18.68 Lacs for the year 2004-05 & 2005-06 respectively under MPCT Act. There are no dues of Income Tax, Wealth Tax, Service Tax and Duty of Custom which have not been deposited on account of any dispute.

(c) There is no amount which is required to be transferred to Investor Education and Protection Fund in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

(viii) The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the Financial Year ended on that date or in the immediately preceding Financial Year.

(ix) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institutions or banks as at Balance Sheet date.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions during the year are not prejudicial to the interest of the Company.

(xi) In our opinion, and according to the information and explanations given to us, the term loans have been applied, on an overall basis, for the purposes for which they were obtained.

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

For Gupta Saharia & Co. Chartered Accountants FRN-103446W

Place : Indore CA Suresh Saharia Dated : 28.05.2015 (Partner) Membership No. 040180


Mar 31, 2014

We have audited the accompanying financial statements of NATIONAL STEEL AND AGRO INDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss Account and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of Internal Control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

2. As required by Section 227(3) of the Act, we report that : 4

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

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

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

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the act read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e) On the basis of the written representations received from the Directors as on March 31, 2014, 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 Section 274(l)(g) of the Act.

ANNEXURE TO THE AUDITORS'' REPORT

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

1.1 (a) In respect of fixed assets, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management, in accordance with the programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its Assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.

(c) During the year, in our opinion, no substantial part of fixed assets has been disposed off by the Company.

1.2 (a) As explained to us, the inventory of the Company has been physically verified during the year by the management. In respect of materials lying with third parties these have been confirmed by them. In our opinion the frequency of the verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation of the size of the Company and the nature of its business.

(c) In our opinion and information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

1.3 (a) The Company has not taken any loans, secured or unsecured, from the Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) Other provisions of the clause are not applicable, hence not commented upon.

1.4 In our opinion and according to the information and explanations given to us, there are adequate Internal Control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in Internal Controls.

1.5 (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered, if any, in the Register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered, if any, in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupee Five Lacs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to prevailing market prices at the relevant time where such market prices are available.

1.6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 apply.

1.7 The Company has an Internal Audit System which in our opinion is adequate and commensurate with the size of the Company and nature of its business.

1.8 We have broadly reviewed the books of account and records in respect of manufacturing of Cold Rolled, GP/GC, Coated Coils/Sheets maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of Cost Records under Section 209(l)(d) of the Companies Act 1956.

We are of the opinion that prima facie the prescribed accounts and records have been maintained. However, we have not made a detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

1.9 (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, there is disputed dues in respect of UP Entry Tax aggregating to Rs. 137.30 lacs is pending before Hon''ble Supreme Court of India, related to the year 2010-11 & Rs. 26.17 lacs pending before Additional Commissioner Appeal, Sales Tax Deptt. Gaziiabad for the year 2008-09, 2009-10 & 2012-13. Another disputed dues of Rs. 6.20 lacs is pending before Joint Commissioner, Sales Tax Deptt. Flaldwani U.K. related to the year 2008-09 & Rs. 6.81 lacs is pending before Sales Tax Deptt. Agra & Rs. 3.46 lacs is pending before Sales Tax Deptt. Jhansi (U.P.) for the year 2013-14. Further appeals are pending related Entry Tax before M.P. Commercial Tax Appellate Board, Bhopal for Rs. 50.47 lacs related to the year 2004-05 & appeals are pending for Rs. 5.20 lacs & Rs. 18.68 lacs for the year 2004-05 & 2005-06 respectively under MPCT Act.

1.10 The Company does not have accumulated losses. The Company has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding Financial Year.

1.11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks during the year.

1.12 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.

1.13 In our opinion, 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.

1.14 In our opinion, 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.

1.15 In our opinion and according to the information and explanations given to us and the representations made by the management, the Company has given guarantee for loans taken by Associate from banks or financial institution. In our opinion, the terms and condition on which the Company has given guarantee are not prima facie prejudicial to the interest of the Company.

1.16 In our opinion the Term Loans taken by the Company have been applied for the purposes for which the Loans were obtained.

1.17 On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long term investment.

1.18 The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained Section 301 of the Act during the year. Accordingly the provisions of the clause 4(xviii) of the order are not applicable to the Company.

1.19 The Company has not issued any Debentures, hence the provisions of Clause 4(xix) are not applicable to the Company.

1.20 During the Financial Year, Company has not raised any money by public issues.

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

For Manoj Khatri & Company Chartered Accountants FRN-011546C

Place : Indore CA Ashish Jain Dated : 30.05.2014 (Partner) Membership No. 403161


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of NATIONAL STEEL AND AGRO INDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss Account 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 principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of Internal Control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with 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 disclosures in the financial statements. The procedures selected depend on the auditors'' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers Internal Control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

2. As required by Section 227(3) of the Act, we report that :

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

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

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

d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act;

e) On the basis of the written representations received from the Directors as on March 31, 2013, 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 Section 274(1)(g) of the Act.

ANNEXURE TO THE AUDITORS'' REPORT

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

1.1 (a) In respect of fixed assets, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management, in accordance with the programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its Assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.

(c) During the year, in our opinion, no substantial part of fixed assets has been disposed off by the Company.

1.2 (a) As explained to us, the inventory of the Company has been physically verified during the year by the management. In respect of materials lying with third parties these have been confirmed by them. In our opinion the frequency of the verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation of the size of the Company and the nature of its business.

(c) In our opinion and information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

1.3 (a) The Company has not taken any loans, secured or unsecured, from the Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. (b) Other provisions of the clause are not applicable, hence not commented upon.

1.4 In our opinion and according to the information and explanations given to us, there are adequate Internal Control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in Internal Controls.

1.5 (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered, if any, in the Register required to be maintained under that Section. (b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered, if any, in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupee Five Lacs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to prevailing market prices at the relevant time where such market prices are available.

1.6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 apply.

1.7 The Company has an Internal Audit System which in our opinion is adequate and commensurate with the size of the Company and nature of its business.

1.8 We have broadly reviewed the books of account and records in respect of manufacturing of Cold Rolled, GP/GC, Coated Coils/Sheets maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act 1956.

We are of the opinion that prima facie the prescribed accounts and records have been maintained. However, we have not made a detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

1.9 (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. (b) According to the information and explanations given to us, disputed dues in respect of UP Entry Tax aggregating to " 142.80 lacs pending before Supreme Court of India (Joint Commissioner (Appeals) Commercial Tax, Ghaziabad) for the period 2009-10 & 2010-11. Further Entry Tax Appeal pending before M.P. Commercial Tax Appellate Board, Bhopal for " 50.47 lacs for the year 2004-05 & under MPCT Act the appeal is pending for " 5.20 lacs & " 18.68 lacs for 2004- 05 & 2005-06 respectively.

1.10 The Company does not have accumulated losses. The Company has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding Financial Year.

1.11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks during the year.

1.12 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.

1.13 In our opinion, 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.

1.14 In our opinion, 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.

1.15 In our opinion, the Company has not given any guarantee for the loans taken by the others from Banks or Financial Institutions during the year, the terms and conditions whereof are prejudicial to the interest of the Company.

1.16 In our opinion the Term Loans taken by the Company have been applied for the purposes for which the Loans were obtained.

1.17 On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long term investment.

1.18 The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained Section 301 of the Act during the year. Accordingly the provisions of the clause 4(xviii) of the order are not applicable to the Company.

1.19 The Company has not issued any Debentures, hence the provisions of Clause 4(xix) are not applicable to the Company.

1.20 During the Financial Year, Company has not raised any money by public issues.

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



For Manoj Khatri & Company

Chartered Accountants

FRN-011546C

Place : Indore CA Ashish Jain

Dated : 30.05.2013 (Partner)

Membership No. 403161


Mar 31, 2012

1. We have audited the attached Balance Sheet of NATIONAL STEEL AND AGRO INDUSTRIES LIMITED as at March 31, 2012 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date both 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 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 the 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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 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 the 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, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956; and

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

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

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph (3) of our report of even date)

3.1 (a) In respect of fixed assets, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management, in accordance with the programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its Assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.

(c) During the year, in our opinion, no substantial part of fixed assets has been disposed off by the Company.

3.2 (a) As explained to us, the inventory of the Company has been physically verified during the year by the management. In respect of materials lying with third parties these have been confirmed by them. In our opinion the frequency of the verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation of the size of the Company and the nature of its business.

(c) In our opinion and information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

3.3 (a) The Company has not taken any loans, secured or unsecured, from the Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) Other provisions of the clause are not applicable, hence not commented upon.

3.4 In our opinion and according to the information and explanations given to us, there are adequate Internal Control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in Internal Controls.

3.5 (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered, if any, in the Register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered, if any, in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupee Five Lacs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to prevailing market prices at the relevant time where such market prices are available.

3.6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 apply.

3.7 The Company has an Internal Audit System which in our opinion is adequate and commensurate with the size of the Company and nature of its business.

3.8 We have broadly reviewed the books of account and records in respect of manufacturing of Cold Rolled, GP/GC, Coated Coils/Sheets maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act 1956.

We are of the opinion that prima facie the prescribed accounts and records have been maintained. However, we have not made a detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

3.9 (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, disputed dues in respect of UP Entry Tax aggregating to 143.43 lacs pending before The Joint Commissioner (Appeals) Commercial Tax, Gaziabad & Appeal at Supreme Court pertaining to period 2009-10 & 2010-11. Further in NSAIL, Indore the Entry Tax Appeal pending before M.P. Commercial Tax Appellate Board, Bhopal for 50.47 lacs for the year 2004-05 & under MPCT Act the appeal is pending for Rs. 23.88 lacs for 2004-05 & 2005-06 respectively.

3.10 The Company does not have accumulated losses. The Company has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding Financial Year.

3.11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks during the year.

3.12 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.

3.13 In our opinion, 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.

3.14 In our opinion, 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.

3.15 In our opinion, the Company has not given any guarantee for the loans taken by the others from Banks or Financial Institutions during the years, the terms and conditions whereof are prejudicial to the interest of the Company.

3.16 In our opinion the Term Loans taken by the Company have been applied for the purposes for which the Loans were obtained.

3.17 On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long term investment.

3.18 The Company has not issued any Debentures, hence the provisions of Clause 4(xix) are not applicable to the Company.

3.19 During the Financial Year, the Company has not raised any money by public issues.

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

For Manoj Khatri & Company

Chartered Accountants

FRN-011546C

Place : Indore CA Ashish Jain

Dated : 30.05.2012 (Partner)

Membership No. 403161


Mar 31, 2011

1. We have audited the attached Balance Sheet of NATIONAL STEEL AND AGRO INDUSTRIES LIMITED as at March 31, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date both 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 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 the 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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 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 the 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, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2011 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956; and

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

(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.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph (3) of our report of even date)

3.1 (a) In respect of fixed assets, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management, in accordance with the programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its Assets. To the best of our knowledge no material discrepancies have been noticed on such verification.

(c) During the year, in our opinion, no substantial part of fixed assets has been disposed off by the Company.

3.2 (a) As explained to us, the inventory of the Company has been physically verified during the year by the management. In respect of materials lying with third parties these have been confirmed by them. In our opinion the frequency of the verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation of the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

3.3 (a) The Company has not taken any loans, secured or unsecured, from the Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) Other provisions of the clause are not applicable, hence not commented upon.

3.4 In our opinion and according to the information and explanations given to us, there are adequate Internal Control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in Internal Controls.

3.5 (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered, if any, in the Register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered, if any, in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupee Five Lacs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to prevailing market prices at the relevant time where such market prices are available.

3.6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 apply.

3.7 The Company has an Internal Audit System which in our opinion is adequate and commensurate with the size of the Company and nature of its business.

3.8 We have broadly reviewed the books of account and records in respect of manufacturing of Cold Rolled, GP/GC, Coated Coils/Sheets maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act 1956.

We are of the opinion that prima facie the prescribed accounts and records have been maintained. However, we have not made a detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

3.9 (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, disputed dues in respect of UP VAT Act aggregating to Rs. 13.10 lacs pending before The Joint Commissioner (Appeals) Commercial Tax, Gaziabad pertaining to period 2008-09 and 2009-10. In respect of Entry Tax aggregating to Rs. 136.76 lacs are pending before Dy. Commissioner Commercial Tax (Appeals), Bhopal pertaining to period 2004-05 and 2007-08 & Rs. 23.88 lacs related with State case are pending at MP Commercial Tax Appellate Board, Bhopal pertaining to period 2004-05 & 2005-06.

3.10 The Company does not have accumulated losses. The Company has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding Financial Year.

3.11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks during the year.

3.12 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.

3.13 In our opinion, 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.

3.14 In our opinion, 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.

3.15 In our opinion, the Company has not given any guarantee for the loans taken by the others from Banks or Financial Institutions during the year, the terms and conditions whereof are prejudicial to the interest of the Company.

3.16 In our opinion the Term Loans taken by the Company have been applied for the purposes for which the Loans were obtained.

3.17 On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long term investment.

3.18 The Company has made preferential issue of 1,18,97,058 equity shares of Rs. 10/- each at a premium of Rs. 13.65 per share upon conversion of 1,18,97,058 share warrants to promoters and other entities in pursuance of the provisions of the Securities and Exchange Board of India (SEBI) (Issue of Capital and Disclosure Requirements) Regulations, 2009.

3.19 The Company has not issued any Debentures, hence the provisions of Clause 4(xix) are not applicable to the Company.

3.20 During the Financial Year, the Company has not raised any money by public issues.

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

For Manoj Khatri & Company Chartered Accountants FRN-011546C

CA Ashish Jain (Partner) Membership No. 403161

Place : Indore Dated : 29.05.2011






Mar 31, 2010

1. We have audited the attached Balance Sheet of NATIONAL STEEL AND AGRO INDUSTRIES LIMITED as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date both 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 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 the 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 of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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 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 the 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, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31,2010 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956; and

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph (3) of our report of even date)

3.1 (a) In respect of fixed assets, the Company has maintained proper records showing full particulars

including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management, in accordance with the programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its Assets. To the best of our knowledge no material discrepancies have been noticed on such verification.

(c) During the year, in our opinion, no substantial part of fixed assets has been disposed off by the Company.

3.2 (a) As explained to us, the inventory of the Company has been physically verified during the year

by the management. In respect of materials lying with third parties these have been confirmed by them. In our opinion the frequency of the verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation of the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and book records were not material, having regard to the size of the operations of the Company.

3.3 (a) The Company has not taken any loans, secured or unsecured, from the Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) Other provisions of the clause are not applicable, hence not commented upon.

3.4 In our opinion and according to the information and explanations given to us, there are adequate Internal Control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in Internal Controls.

3.5 (a) In our opinion and according to the information and explanations given to us, the particulars

of contracts or arrangements referred to in Section 301 of the Act have been entered, if any, in the Register required to be maintained under that Section. (b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered, if any, in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupee Five Lacs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to prevailing market prices at the relevant time where such market prices are available.

3.6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 apply.

3.7 The Company has an Internal Audit System which in our opinion is adequate and commensurate with the size of the Company and nature of its business.

3.8 We have broadly reviewed the books of account and records in respect of manufacturing of Cold Rolled, GP/GC, Coated Coils/Sheets maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act 1956.

We are of the opinion that prima facie the prescribed accounts and records have been maintained. However, we have not made a detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

3.9 (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. (b) According to the information and explanations given to us, disputed dues in respect of Sales Tax aggregating to Rs. 45.04 lacs pending before The Dy. Commissioner Commercial Tax (Appeals) pertaining to period 1995-07 and Rs. 19.91 lacs pending before Dy. Commissioner (Appeals) Gaziabad pertaining to period 2005-10. In respect of Entry Tax aggregating to Rs.50.47 lacs are pending before High court and Dy. Commissioner Commercial Tax (Appeals) pertaining to period 2004-05. Rs. 44.41 lacs are pending before Commissioner of Income Tax (Appeals) Mumbai pertaining to period 2000-04.

3.10 The Company does not have accumulated losses. The Company has not incurred cash losses during the Financial Year covered by our audit and there was cash loss in the immediately preceding Financial Year.

3.11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks during the year.

3.12 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.

3.13 In our opinion, 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.

3.14 In our opinion, 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.

3.15 In our opinion, the Company has not given any guarantee for the loans taken by the others from Banks or Financial Institutions during the year, the terms and conditions whereof are prejudicial to the interest of the Company.

3.16 In our opinion the Term Loans taken by the Company have been applied for the purposes for which the Loans were obtained.

3.17 On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short term basis which have been used for long term investment.

3.18 The Company has not made any preferential allotment of shares, however the Company has issued warrants convertible into shares on preferential basis to promoters and other entities in pursuance of the provisions of the Securities and Exchange Board of India (SEBI) (issue of capital and disclosure requirements) regulations, 2009.

3.19 The Company has not issued any Debentures, hence the provisions of Clause 4(xix) are not applicable to the Company.

3.20 During the Financial Year, the Company has not raised any money by public issues.

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



For Manoj Khatri & Company

Chartered Accountants

FRN-011546C



Place : Indore CA Ashish Jain

Dated : 29.05.2010 (Partner)

Membership No. 403161

 
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