Auditor Report of OCL Iron & Steel Ltd.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of OCL Iron and Steel Limited (‘The Company), which comprises the Balance Sheet as at 31^st March 2018, the statement of Profit and Loss (including other comprehensive income), the statement of Change in Equity and the statement of Cash Flow for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The company’s board of directors is responsible for the matters specified in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance [including other comprehensive income,] change in equity and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Indian accounting standards (Ind AS) prescribed under section 133 of the Act, read with relevant rules issued there under.

This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

In conducting 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 of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the 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 standalone Ind AS financial statements.

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

Emphasis of Matter

(i) The Company’s accumulated losses as on 31.03.2018 have resulted in complete erosion of its net worth. Further as on that date, the company’s current liabilities substantially exceeded the current assets. These factors raise a substantial doubt about the company’s ability to continue as a going concern in the foreseeable future. However, the company’s financial statements have been prepared on going concern basis as per the management opinion disclosed in the said note. Our opinion is not modified in respect of this matter.

(ii) The company has classified all its borrowings from banks as current liabilities, being declared as nonperforming assets (NPA) by the lenders. Our opinion is not modified in respect of this matter.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 March 31, 2018 and its loss, total comprehensive income, the change in equity and its cash flows for the year ended on that date read with the points mentioned in Emphasis of matter paragraph.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub section (11) of section 143 of the act, we give in annexure A , a statement on the matters specified in paragraph 3 & 4 of the Order, to the extent applicable.

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

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

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

(c) The Balance Sheet, the statement of Profit and Loss including Other Comprehensive Income, and the Statement of Changes in Equity and Statement of Cash Flow dealt with by this Report are in agreement with relevant the books of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act;

(e) On the basis of the written representations received from the directors as on 31^st March 2018 and taken on record by the board of directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and the operating effectiveness of the company’s internal financial controls over financial reporting; and

(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, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements [Refer Note no.34.1].

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 - A to the Independent Auditors’ Report

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended 31st March 2018.

(i) In respect of the Company’s property, plant and equipment:

(a) The company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) As explained to us, the property, plant and equipment, according to the practice of the company have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of physical verification of property, plant and equipment is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are held in the name of the company.

(ii) We have been informed that the inventories are physically verified during the period by the management at reasonable intervals. The frequency of physical verification, in our opinion, is reasonable having regard to the size of the company and nature of its business. The discrepancies noticed on verification between the physical inventories and the book records were not material in relation to the operation of the company and the same have been properly dealt with in the books of account.

(iii) The Company has granted unsecured loans to wholly owned subsidiary which is covered in the register maintained under section 189 of the Companies Act, 2013 (’Act) during the period under review. Such loan is repayable on demand and as such there is no irregularity with regards to the amount being overdue as on 31st March 2018.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act 2013, in respect of loans, investments, guarantees and security.

(v) Since the company has not accepted any deposit from public, the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under with regard to the deposits accepted from the public are not applicable.

(vi) The Central Government has prescribed the maintenance of cost records under section 148 (1) of the Companies Act 2013 (‘the Act’). On the basis of records produced before us for our verification, we are of the opinion that, prima facie, the prescribed accounts and cost records have been maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts & records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, there had been delays in depositing undisputed statutory dues including provident fund, employees state insurance, income-tax, sales tax, service tax, GST duty of excise, value added tax, cess and other statutory dues with appropriate authorities during the year ended 31^st March 2018.The outstanding amount as on 31^st March, 2018 on account of statutory dues being Rs. 5,508.49 Lakh. According to the information and explanations given to us, arrears of undisputed statutory dues outstanding for a period of more than six months as on the date of balance sheet i.e. March 31, 2018, was Rs. 2,662.63 Lakh.

(b) According to the information and explanations given to us, and as per our verification of records of the company, the company has not paid / deposited following statutory dues on account of disputes:

S.No.	Name of the Statute	Nature of Dues	Year to which it relates	Forum where dispute is pending (in	Amount Lakhs)
1	Central Sales Tax	CST	2002-03	Tribunal	1.00
2	Central Sales Tax	CST	2004-05	Odisha Sales Tax Tribunal	79.33
3	Central Sales Tax	CST	2006-07	Odisha Sales Tax Tribunal, Cuttack	8.98
4	Central Sales Tax	CST	2007-08	Odisha Sale Tax TRIBUNAL, Cuttack	17.18
5	Central Sales Tax	CST	2010-11	Odisha Sales Tax Tribunal, Cuttack	20.30
6	Central Sales Tax	CST	2009-10	Joint Commissioner of Central Sales Tax, Jajpur	14.91
7	Central Sales Tax	CST	2011-12	Odisha Sales Tax Tribunal, Cuttack	23.67
8	Central Sales Tax	CST	2011-13	Odisha Sales Tax Tribunal, Cuttack	58.25
9	Central Sales Tax	CST	2013-14	Odisha Sale Tax TRIBUNAL, Cuttack	2.72
10	Central Sales Tax	CST	2014-15	Odisha Sale Tax TRIBUNAL, Cuttack	81.45
11	Central Service Tax	Service Tax	2006-12	Addl. Commissioner, (Adjn.) Commissionerate Office, Bhubaneswar	30.00
12	Central Service Tax	Service Tax	2011-16	Addl. Commissioner (Audit), Rourkela Circle, Bhubaneswar	75.89
13	Central Service Tax	Service Tax	2008-10	Commissioner, Commissionerate Office, Bhubaneswar	275.73
14	Central Excise Tax	Cenvat	2005-06	CESTAT	23.68
15	Odisha Entry Tax	State Entry Tax2002-03		Tribunal	0.07
16	Odisha Entry Tax	State Entry Tax2005-06		Joint Commissioner of Sales Tax, Sundergarh	2.66
17	Odisha Entry Tax	State Entry Tax2006-07		Addl. Commissioner of Sales Tax, Odisha, Cuttack	3.05
18	Odisha Entry Tax	State Entry Tax2007-08		Commissioner of Sales Tax, Odisha, Cuttack	23.55
19	Odisha Entry Tax	State Entry Tax2007-10		Addl. Commissioner of Sales Tax, North Zone Sambalpur	4.07
20	Odisha Entry Tax	State Entry Tax2010-12		Commissioner of Sales Tax, Odisha, Cuttack	3.52

21	Odisha Entry Tax	State Entry Tax2011-13		Commissioner of Sales Tax, Odisha, Cuttack	20.58
22	Odisha Entry Tax	State Entry Tax2011-13		Odisha High Court	7.38
23	Odisha Entry Tax	State Entry Tax2011-13		Odisha High Court	51.30
24	Rajasthan Entry Tax	State Entry Tax2011-16		Assistant Commissioner of Commercial Taxes	683.57
25	Odisha Sales Tax	VAT	2005-06	Addl. Commissioner of Sales Tax Odisha, Cuttack	473.68
26	Odisha Sales Tax	VAT	2006-07	Odisha Sales Tax Tribunal, Cuttack	36.17
27	Odisha Sales Tax	VAT	2007-08	Odisha Sales Tax Tribunal, Cuttack	6.57
28	Odisha Sales Tax	VAT	2009-10	Commissioner of Sales Tax, Odisha, Cuttack	25.01
29	Odisha Sales Tax	VAT	2009-10	Addl. Commissioner of Commercial Taxes, Jajpur Road	8.64
30	Odisha Sales Tax	VAT	2010-11	Sales Tax Officer, Keonjhar	3.51
31	Odisha Sales Tax	VAT	2010-12	Commissioner of Sales Tax, Odisha, Cuttack	16.77
32	Odisha Sales Tax	VAT	2011-13	Commissioner of Sales Tax, Odisha, Cuttack	37.67
33	Odisha Sales Tax	VAT	2011-13	Odisha High Court	35.14
34	Odisha Sales Tax	VAT	2011-13	Odisha High Court	76.80
	TOTAL				2,232.80

(viii) According to the information and explanations given to us and as per our verification of the records of the company, there had been delays in payment of instalments and Interest of term loans and foreign currency loans to the banks during the period. In view of the persisting defaults, entire term loans amounting to Rs. 1,35,985.91 Lakhs [including interest due thereon] is under default.

(ix) According to the information and explanations given to us, and as per our verification of the records of the company, the company has not raised moneys by way of initial public offer or further public offer (Including debt instruments). The term loans availed by the company have been applied for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us, no fraud by the company or on the company by its officers or employees has been noticed or reported during the Year ended 31^st March 2018.

(xi) According to the information and explanations give to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, and according to the information and explanations given to us, the company is not a Nidhi company. Therefore, the provisions of Clause 3 (xii) of the Order are not applicable to the company.

(xiii) According to the information and explanations given to us and as per our verification of the records of the company all transactions with the related parties are in compliance with the Sections 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and as per our verification of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review. Accordingly, the provisions of Clause 3 (xiv) of the order are not applicable to the company.

(xv) According to the information and explanations given to us, and as per our verification of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of Clause 3 (xv) of the order are not applicable to the company.

(xvi) In our opinion, the company is not required to be registered under section 45-IA of the reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3 (xvi) of the order are not applicable to the company.

Annexure - B to the Independent Auditors’ Report

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of OCL Iron and Steel Limited (“the Company”) as of 31st March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March 2018, based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For A.C. Gupta & Associates

Chartered Accountants

Firm’s registration number: 008079N

A.C. Gupta

Partner

Membership number: 008565

New Delhi

May 30, 2018

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Mar 31, 2016

To the Members of OCL Iron and Steel Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of OCL Iron & Steel Limited ("the company"), which comprise the balance sheet as at 31^st March 2016, the statement of profit and loss, the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The company''s board of directors is responsible for the matters specified 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 the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at 31^st March 2016 and its loss, 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, 2016 ("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 , a statement on the matters specified in paragraph 3 & 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 purposes of our audit;

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

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

d) In our opinion, the aforesaid Standalone financial statements comply with the accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of written representations received from the directors as on 31^st March 2016 and taken on record by the board of directors, none of the directors is disqualified as on 31^st March 2016, from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B; and

g) With respect to the other matters included in the Auditor''s Report in accordance with Rule

11 of the Companies (Audit & Auditors) Rules, 2014, in our opinion and to best of our information and according to the explanations given to us :

i) The company has disclosed the impact of pending litigations on its financial position in its standalone financial statements (Refer to Note 29).

ii) The company did not have any long-term contract including derivatives contract 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.

The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31st March 2016.

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

(b) As explained to us, fixed assets, according to the practice of the Company, have been physically verified by the management at reasonable intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) We have been informed that the inventories are physically verified during the year by the management at reasonable intervals. The frequency of physical verification, in our opinion, is reasonable having regard to the size of the company and nature of its business. The discrepancies noticed on verification between the physical inventories and the book records were not material in relation to the operation of the Company and the same have been properly dealt with in the books of account.

(iii) The company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Companies Act, 2013 during the period under review:

(a) The terms and conditions of grant of such loan are not prejudicial to the interest of the company.

(b) The schedule of repayment is stipulated and there is no irregularity in this regard.

(c) No amount is overdue for more than 90 days as on 31^st March, 2016.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act 2013 in respect of loans, investments, guarantees and security.

(v) The Company has not accepted any deposits from the public. Therefore, the provisions of clause

(v) of paragraph 3 of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company.

(vi) The Central Government has prescribed the maintenance of cost records under section 148 (1) of the Companies Act 2013 (''the Act''). On the basis of records produced before us for our verification, we are of the opinion that, prima facie, the prescribed accounts and cost records have been maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts & records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, the company has been regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with appropriate authorities during the year.

According to the information and explanation given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears as at 31st March 2016 for a period of more than six months from the date they became payable.

(b) According to information and explanations given to us, and the records of the company examined by us ,dues of income tax, sales tax, service tax, custom duty, excise duty, value added tax and cess which have not been deposited on account of matters pending before appropriate authorities are as follows:

S. No.	Name of the Statute	Nature of Dues	Year to which it relates	Forum where dispute is pending	Amount (in Lacs)
1	Central Excise Tax	Cenvat	2005-16	Addl. Commissioner, Commissioner ate office, Bhubaneswar	21.24
2	Central Excise Tax	Cenvat	2012-14	Addl. Commissioner, (Adjn.) Commissioner ate office, Bhubaneswar	15.45
3	Central Sales Tax	CST	2002-03	Odisha Sales Tax Tribunal	1.00
4	Central Sales Tax	CST	2004-05	Odisha Sales Tax Tribunal	79.33
5	Central Sales Tax	CST	2006-07	Odisha Sales Tax Tribunal, Cuttack	8.98
6	Central Sales Tax	CST	2007-10	Addl. Commissioner of Sales Tax, Odisha, Sambalpur	33.64
7	Central Sales Tax	CST	2010-11	Addl. Commissioner of Commercial tax, Sambalpur	26.96
8	Central Sales Tax	CST	2011-12	Odisha Sales Tax Tribunal, Cuttack	23.67
9	Central Sales Tax	CST	2011-13	Odisha Sales Tax Tribunal, Cuttack	58.25
10	Central Sales Tax	CST	2011-13	Odisha High Court	0.84
11	Central Sales Tax	CST	2013-14	Addl. Commissioner of Sales Tax Appeal, North Zone, Sambalpur	7.65
12	Central Service Tax	Service Tax	2006-12	Addl. Commissioner, (Adjn.) Commissioner ate office, Bhubaneswar	30.00
13	Central Service Tax	Service Tax	2008-10	Commissioner, Commissioner ate office, Bhubaneswar	275.73
14	Central Service Tax	Service Tax	2010-12	Addl. Commissioner (Audit), Commissioner ate office, Bhubaneswar	23.05
15	Central Service Tax	Service Tax	2013-14	Addl. Commissioner (Audit), Commissioner ate office, Bhubaneswar	8.57
16	Central Service Tax	Service Tax	2013-14	Commissioner, Commissioner ate office, Bhubaneswar	52.99
17	Odisha Entry Tax	State Entry Tax	2002-03	Odisha Sales Tax Tribunal	0.08

18	Odisha Entry Tax	State Entry Tax	2005-06	Joint Commissioner of Sales Tax, Sundergarh	2.66
19	Odisha Entry Tax	State Entry Tax	2006-07	Addl. Commissioner of Sales Tax, Odisha, Cuttack	3.05
20	Odisha Entry Tax	State Entry Tax	2007-08	Commissioner of Sales Tax, Odisha, Cuttack	23.55
21	Odisha Entry Tax	State Entry Tax	2007-10	Addl. Commissioner of Sale: Tax, North Zone Sambalpur	4.07
22	Odisha Entry Tax	State Entry Tax	2010-12	Commissioner of Sales Tax, Odisha, Cuttack	3.52
23	Odisha Entry Tax	State Entry Tax	2011-13	Commissioner of Sales Tax, Odisha, Cuttack	20.58
24	Odisha Entry Tax	State Entry Tax	2011-13	Odisha High Court	7.38
25	Odisha Entry Tax	State Entry Tax	2011-13	Odisha High Court	51.30
26	Odisha Sales Tax	VAT	2005-06	Addl. Commissioner of Sales Tax Odisha, Cuttack	117.89
27	Odisha Sales Tax	VAT	2006-07	Odisha Sales Tax Tribunal, Cuttack	36.17
28	Odisha Sales Tax	VAT	2007-08	Odisha Sales Tax Tribunal, Cuttack	6.57
29	Odisha Sales Tax	VAT	2009-10	Commissioner of Sales Tax, Odisha, Cuttack	25.01
30	Odisha Sales Tax	VAT	2009-10	Addl. Commissioner of Commercial Taxes, Jajpur Road	7.64
31	Odisha Sales Tax	VAT	2010-12	Commissioner of Sales Tax, Odisha, Cuttack	16.77
32	Odisha Sales Tax	VAT	2011-13	Commissioner of Sales Tax, Odisha, Cuttack	37.67
33	Odisha Sales Tax	VAT	2011-13	Sales Tax Officer, Keonjhar	0.25
34	Odisha Sales Tax	VAT	2011-13	Odisha High Court	35.14
35	Odisha Sales Tax	VAT	2011-13	Odisha High Court	76.80
			TOTAL		1143.45

(viii) According to the information and explanations given to us and as per our verification of the records of the company, the Company has defaulted in repayment of installments and interest on term loans to banks during the year. Note No. 31 of the financial statements contains details in this regard.

(ix) According to the information and explanations given to us and as per our verification of the records of the company, the Company has not raised moneys by way of initial public offer or further public offer (including Debt instruments). The term loans availed by the company have been applied for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us, no fraud by the company or on the company by its officers or employees has been noticed or reported during the year ended 31^st March 2016.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, and according to the information and explanations given to us, the company is not a Nidhi company. Therefore, the provisions of Clause 3 (xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanations given to us and as per our verification of the records of the company all transactions with the related parties are in compliance with the Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and as per our verification of the records of the company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly the provisions of Clause 3 (xiv) of the order are not applicable to the Company.

(xv) According to the information and explanations given to us and as per our verification of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with it .Accordingly, the provisions of Clause 3 (xv) of the order are not applicable to the Company.

(xvi) In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3 (xvi) of the order are not applicable to the Company.

Report on the Internal Financial Controls under Clause (I) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of OCL Iron & Steel Limited ("the Company") as of 31st March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future year are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For A.C. Gupta & Associates

Chartered Accountants

Firm''s registration number: 008079N

A.C. Gupta

Partner

Membership number: 8565

New Delhi

27th May, 2016

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Mar 31, 2014

We have audited the accompanying financial statements of OCL Iron and Steel Limited as at 31st March 2014, which comprises the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"), read with General Circular 15/2013 dated 13 September 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

We believe that the audit evidence we have obtained is 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 Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; read with General Circular 15/2013 dated 13 September 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013.

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

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT REFERRED TO IN POINT 1 OF PARAGRAPH 5 OF OUR REPORT OF EVEN DATE OF OCL IRON AND STEEL LIMITED 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, fixed assets, according to the practice of the Company, have been physically verified by the management at reasonable intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) During the year, the company has not disposed off any of the fixed assets and the going concern status of the company is not affected.

(ii) (a) The inventories has been physically verified during the year by the management. In our opinion, the frequency of physical verification is reasonable.

(b) The procedure for physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion, the company has maintained proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material & the same have been properly dealt with in the books of account.

(iii) (a) The Company, during the year under report, has granted loan and advances to one of its subsidiary covered in the register maintained under Section 301 of the Companies Act, 1956.

1. During the year Company has granted loan aggregating Rs. 6820.00 lacs the balance at the end of the year & the maximum amount involved during the year was Rs. 13625.00 lacs.

2. In our opinion & according to the information & explanations given to us, the rate of interest, where-ever applicable & other terms & conditions are not prima-facie prejudicial to the interest of the company.

3. In respect of the loan granted to its subsidiaries, the loan is interest free & being repayable on demand are not overdue.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(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 purchase of inventories, consumable stores, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act has been entered in the register required to be maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies act, 1956 & exceeding the value of Rs. 5.00 lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted public deposits within the meaning and provisions of sec 58A and 58AA of the companies Act, 1956.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central government has prescribed maintenance of cost accounting records under section 209 (1) (d) of the Companies Act, 1956. However, we are neither required to carry out nor have carried out any detailed examination of such accounts & records.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) The disputed statutory dues aggregating to Rs 1620.70 lacs, which have not been deposited on account of matters pending before appropriate authorities are as under:

S.No Name of the Nature of Period to which Statute Dues it relates

1. Central Sales Tax CST 2002-03

2. Central Sales Tax CST 2004-05

3. Orissa VAT VAT 2005-06

4. Orissa VAT VAT 2006-07

5. Central Sales Tax CST 2006-07

6. Orissa Entry tax State Entry tax 2002-03

7. Orissa Entry tax State Entry tax 2006-07

8. Orissa Entry Tax State Entry Tax 2007-08

9. Central service tax Service Tax 2008-10

13. Central Service Tax Service Tax 2006-07 To 2011-12

14. Central Excise Tax CENVAT 2005-06

15. Central Sales Tax CST 2010-11

16. Cst/Oet CST/OET 2005-06

17. Orissa Vat VAT 2007-08

18. Orissa Vat VAT 2009-10

19. Central Sales Tax CST 2011-12

20. Central Sales Tax CST 2007-10

21. Orissa Entry Tax State Entry Tax

22. Orissa Vat VAT 20011-13

23. Central Sales Tax CST 2011-13

23. Orissa Entry Tax State Entry Tax

Total 1620.70





S.No Name of the Forum where Amount Statute dispute is pending (in Lacs)

1. Central Sales Tax Orissa Sales Tax Tribunal 1.00

2. Central Sales Tax Orissa Sales Tax Tribunal 79.33

3. Orissa VAT Addl. Commisioner of Sales Tax, Orissa, Cuttack 117.89

4. Orissa VAT Addl. Commisioner of Sales Tax, Orissa, Cuttack 36.17

5. Central Sales Tax Commisioner of Sales Tax, Orissa, Cuttack 8.98

6. Orissa Entry tax Orissa Sales Tax Tribunal 0.08

7. Orissa Entry tax Addl. Commisioner of sales Tax, Orissa, Cuttack 3.05

8. Orissa Entry Tax Commisioner of Sales Tax, Orissa, Cuttack 23.55

9. Central service tax Commissioner, Commissionerate Office, Bhubaneswar 275.73

13. Central Service Tax Addl. Commissioner, (Adjn.) Commissionerate Office, Bhubaneswar 30.00

14. Central Excise Tax Asst. Commissioner, Division Office 1.59

15. Central Sales Tax Dy.commissioner Of Sales Tax 209.84

16. Cst/Oet Sto 4.24

17. Orissa Vat Commissioner Of Sales Tax, Orissa 6.57

18. Orissa Vat Addl. Commissioner Of Sales Tax,Orissa Cuttack 25.01

19. Central Sales Tax Addl. Commissioner Of Sales Tax, Orissa Cuttack 139.91

20. Central Sales Tax Commissioner Of Sales Tax, Orissa Cuttack 33.64

21. Orissa Entry Tax Commissioner Of Sales Tax, Orissa Cuttack 4.07

22. Orissa Vat Addl. Commissioner Of Sales Tax,Orissa Cuttack 37.67

23. Central Sales Tax Addl. Commissioner Of Sales Tax, Orissa Cuttack 561.80

23. Orissa Entry Tax Commissioner Of Sales Tax, Orissa Cuttack 20.58

Total 1620.70

(x) The company has not any accumulated losses at the end of the financial year 31st March, 2014. And it has not incurred any cash losses in current financial year and immediately preceding financial year.

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

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause of 4(xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company.

(xiv) 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 (as amended) are not applicable to the company.

(xv) The company has not given guarantees for credit facilities taken by others from Banks or Financial Institutions, the terms and conditions thereof are not prejudicial to the interest of the company.

(xvi) According to the information and explanation given to us, in our opinion, term loan availed by the company were, prima facie, applied by the company during the year under report for the purpose for which the term loans were obtained, other than temporary deployment pending applications.

(xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment and no long term funds have been used to finance short term assets except permanent working capital.

(xviii) During the year, the company has not made any Preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Act.

(xix) The company has not issued any debentures during the year and therefore the question of creating security / charge does not arise.

(xx) According to information and explanation given to us and the records of the company examined by us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For A.C Gupta & Associates Chartered Accountants

Sd/- (A.C. GUPTA)

Place : New Delhi Partner Dated : 29th May, 2014 Membership No. 8565 Firm Regd. No. 008079N

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of OCL Iron and Steel Limited as at 31st March 2013, which comprises the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial Statements

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

Auditor''s Responsibility

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

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

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

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

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT REFERRED TO IN POINT 1 OF PARAGRAPH 5 OF OUR REPORT OF EVEN DATE OF OCL IRON AND STEEL LIMITED FOR THE YEAR ENDED 31st March 2013

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

(b) As explained to us, fixed assets, according to the practice of the Company, have been physically verified by the management at reasonable intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) During the year, the company has not disposed off any of the fixed assets and the going concern status of the company is not affected.

(ii) (a) The inventories has been physically verified during the year by the management. In our opinion, the frequency of physical verification is reasonable.

(b) The procedure for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion, the company has maintained proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material & the same have been properly dealt with in the books of account.

(iii) The Company, during the year under report, has granted secured loan to one of its subsidiary covered in the register maintained under Section 301 of the Companies Act, 1956.

a) The balance at the end of the year & the maximum amount involved during the year was Rs. 6805.00 lacs.

b) In our opinion & according to the information & explanations given to us, the rate of interest, where-ever applicable & other terms & conditions are not prima-facie prejudicial to the interest of the company.

c) In respect of the loan granted to its subsidiaries, the loan is interest free & being repayable on demand are not overdue.

(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 purchase of inventories, consumable stores, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act has been entered in the register required to be maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies act, 1956 & exceeding the value of Rs. 5.00 lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted public deposits within the meaning and provisions of sec 58A and 58AA of the companies Act, 1956.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central government has prescribed maintenance of cost accounting records under section 209 (1) (d) of the Companies Act, 1956. However, we are neither required to carry out nor have carried out any detailed examination of such accounts & records.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) The disputed statutory dues aggregating to Rs1000.65 lacs, which have not been deposited on account of matters pending before appropriate authorities are as under:

S. No Name of the Nature of Period to which Statute Dues it relates

1. Central Sales Tax CST 2002-03

2. Central Sales Tax CST 2004-05

3. Orissa VAT VAT 2005-06

4. Orissa VAT VAT 2006-07

5. Central Sales Tax CST 2006-07

6. Orissa Entry tax State Entry tax 2002-03

7. Orissa Entry tax State Entry tax 2006-07

8. Orissa Entry Tax State Entry Tax 2007-08

9. Central service tax Service Tax 2008-10

13. Central Service Tax Service Tax 2006-07 To 2011-12

14. Central Excise Tax Cenvat 2005-06

15. Central Sales Tax Cst 2010-11

16. Cst/Oet Cst/Oet 2005-06

17. Orissa Vat Vat 2007-08

Name Forum where Amount dispute is pending (in Lacs)

Central Sales Tax Orissa Sales Tax Tribunal 1.00

Central Sales Tax Orissa Sales Tax Tribunal 79.33

Central Sales Tax Addl. Commisioner of Sales Tax, Orissa, Cuttack 117.89 Addl. Commisioner of

Central Sales Tax Sales Tax, Orissa, Cuttack 36.17 Commisioner of

Central Sales Tax Sales Tax, Orissa, Cuttack 8.98 Central Sales Tax Orissa Sales Tax Tribunal 0.08

Addl. Commisioner of Central Sales Tax Sales Tax, Orissa, Cuttack 3.05 Commisioner of

Central Sales Tax Sales Tax, Orissa, Cuttack 23.55

Commissioner,Commissionerate Central Sales Tax office, Bhubaneswar 275.73 Addl. Commissioner, (Adjn.) Commissionerate Office, Bhubaneswar 30.00

Central Sales Tax Asst. Commissioner, Division Office 1.59

Central Sales Tax Dy.commissioner Of Sales Tax 209.84

Central Sales Tax Sto 4.24

Commissioner Of Central Sales Tax Sales Tax, Orissa 6.57

(x) The company has not any accumulated losses at the end of the financial year 31st March, 2013. And it has not incurred any cash losses in current financial year and immediately preceding financial year.

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

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause of 4(xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company.

(xiv) 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 (as amended) are not applicable to the company.

(xv) The company has not given guarantees for credit facilities taken by others from Banks or Financial Institutions, the terms and conditions thereof are not prejudicial to the interest of the company.

(xvi) According to the information and explanation given to us, in our opinion, term loan availed by the company were, prima facie, applied by the company during the year under report for the purpose for which the term loans were obtained, other than temporary deployment pending applications.

(xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment and no long term funds have been used to finance short term assets except permanent working capital.

(xviii) During the year, the company has not made any Preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Act.

(xix) The company has not issued any debentures during the year and therefore the question of creating security / charge does not arise.

(xx) According to information and explanation given to us and the records of the company examined by us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For A.C Gupta & Associates

Chartered Accountants Sd/-

(A.C. GUPTA)

Place:New Delhi Partner

Dated: 30th May, 2013 Membership No. 8565

Firm Regd. No. 008079N

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Mar 31, 2012

We have audited the attached Balance Sheet of OCL Iron and Steel Limited as at 31st March 2012, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditors' Report) Order, 2003 (as amended) by the companies (Auditors' Report) (amended) order, 2004 (together the order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said order.

Further to our comments in the Annexure referred to 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 purpose 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 of the company, 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 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) 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 31st March 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 Cash Flow Statement, of the cash flow for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE OF OCL IRON AND STEEL LIMITED FOR THE YEAR ENDED 31st March 2012

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

(b) As explained to us, fixed assets, according to the practice of the Company, have been physically verified by the management at reasonable intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) During the year, the company has not disposed off any of the fixed assets and the going concern status of the company is not affected.

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

(b) The procedure for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion ,the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material & the same have been properly dealt with in the books of account.

(iii) The Company, during the year under report, has not granted/taken any loans secured or unsecured to/from the Companies and joint ventures, firms or other parties covered 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, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, consumable stores, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act has been entered in the register required to be maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies act, 1956 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted public deposits within the meaning and provisions of sec 58A and 58AA of the companies Act, 1956.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central government has prescribed maintenance of cost accounting records under section 209 (1) (d) of the Companies Act, 1956. However we are neither required to carryout nor have carried out any detailed examination of such accounts and records.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) The disputed statutory dues aggregating to Rs1000.65 lacs, which have not been deposited on account of matters pending before appropriate authorities are as under:

S. No Name of the Statute Nature of Period to which Dues it relates

1. Central Sales Tax CST 2002-03

2. Central Sales Tax CST 2004-05

3. Orissa VAT VAT 2005-06

4. Orissa VAT VAT 2006-07

5. Central Sales Tax CST 2006-07

6. Orissa Entry tax State Entry tax 2002-03

7. Orissa Entry tax State Entry tax 2006-07

8. Orissa Entry Tax State Entry Tax 2007-08

9. Central service tax Service Tax 2008-10

13. Central Service Tax Service Tax 2006-07 To 2011-12

14. Central Excise Tax Cenvat 2005-06

15. Central Sales Tax Cst 2010-11

16. Cst/Oet Cst/Oet 2005-06

17. Orissa Vat Vat 2007-08

18. Orissa Vat Vat 2009-10

19. Central Sales Tax Cst 2011-12

20. Central Sales Tax Cst 2007-10

21. Orissa Entry Tax State Entry Tax

Total

Name of the Statute Forum where Amount dispute is pending (in Lacs)

Central Sales Tax Orissa Sales Tax Tribunal 1.00

Central Sales Tax Orissa Sales Tax Tribunal 79.33

Orissa VAT Addl. Commisioner of Sales Tax, Orissa, Cuttack 117.89

Orissa VAT Addl. Commisioner of Sales Tax, Orissa, Cuttack 36.17

Central Sales Tax Commisioner of Sales Tax, Orissa, Cuttack 8.98

Orissa Entry tax Orissa Sales Tax Tribunal 0.08

Orissa Entry tax Addl. Commisioner of Sales Tax, Orissa, Cuttack 3.05

Orissa Entry Tax Commisioner of Sales Tax, Orissa, Cuttack 23.55

Central Service tax Commissioner, Commissionerate Office, Bhubaneswar 275.73

Central Service tax Addl. Commissioner, (Adjn.) Commissionerate Office, Bhubaneswar 30.00

Central Excise Tax Asst. Commissioner, Division Office 1.59

Central Sales Tax Dy.commissioner Of Sales Tax 209.84

Cst/Oet Sto 4.24

Orissa Vat Commissioner Of Sales Tax, Orissa 6.57

Orissa Vat Addl. Commissioner Of Sales Tax, Orissa Cuttack 25.01

Central Sales Tax Addl. Commissioner Of Sales Tax, Orissa Cuttack 139.91

Central Sales Tax Commissioner Of Sales Tax, Orissa Cuttack 33.64

Orissa Entry Tax Commissioner Of Sales Tax, Orissa Cuttack 4.07

Total 1000.65

(x) The company has not any accumulated losses at the end of the financial year 31st March, 2012. And it has not incurred any cash losses in current financial year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks or debenture holders.

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause of 4(xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company.

(xiv) 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 (as amended) are not applicable to the company.

(xv) The company has not given guarantees for credit facilities taken by others from Banks or Financial Institutions, the terms and conditions whereof are not prejudicial to the interest of the company.

(xvi) According to the information and explanation given to us, in our opinion, term loan availed by the company were, prima facie, applied by the company during the year under report for the purpose for which the term loans were obtained, other than temporary deployment pending applications.

(xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment and no long term funds have been used to finance short term assets except permanent working capital.

(xviii) During the year, the company has not made any Preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Act.

(xix) The company has not issued any debentures during the year and therefore the question of creating security / charge does not arise.

(xx) According to information and explanation given to us and the records of the company examined by us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For & on behalf of

A.C Gupta & Associates

Chartered Accountants

Sd/-

(A.C. GUPTA)

Place : New Delhi Partner

Dated : 3rd September, 2012 Membership No. 8565

Firm Regd. No. 008079N

---

Mar 31, 2011

We have audited the attached Balance Sheet of OCL Iron and Steel Limited as at 31st March 2011 , the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditors' Report) Order, 2003 (as amended) by the companies (Auditors' Report) (amended) order, 2004 (together the order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said order. >

Further to our comments in the Annexure referred to 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 purpose 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 of the company, 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 31st March 201 land taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section(l) of section 274 of the Companies Act, 1956;

(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 ofthe Balance Sheet, of the state of affairs of the Company as at 31st March 2011 ;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE OF OCL IRON AND STEEL LIMITED FOR THE YEAR ENDED 31st March 2011

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

(b) As explained to us, fixed assets, according to the practice of the Company, have been physically verified by the management at reasonable intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) During the year, the company has not disposed off any of the fixed assets and the going concern status of the company is not affected.

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

(b) The procedure for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion ,the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material & the same have been properly dealt with in the books of account.

(iii) The Company, during the year under report, has not granted / taken any loans secured or unsecured to / from the companies and joint ventures, firms or other parties covered 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, there are adequate internal control procedures commensurate with the size ofthe Company and the nature of its business with regard to purchase of inventories, consumable stores, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act has been entered in the register required to be maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies act, 1956 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted public deposits within the meaning and provisions of sec 58A and 58AA of the companies Act, 1956.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central government has prescribed maintenance of cost accounting records under section 209 (1) (d) of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been properly maintained.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) The disputed statutory dues aggregating to Rs. 644.57 lacs, which have not been deposited on account of matters pending before appropriate authorities are as under:

S. No Name of the Statute Nature of Period to which Forum where Amount Dues it relates dispute is pending (in Lacs)

1. Central Sales Tax CST 2002-03 Orissa Sales Tax Tribunal 1.00

2. Central Sales Tax CST 2004-05 Orissa Sales Tax Tribunal 79.33

3. Orissa VAT VAT 2005-06 Addl. Commisioner of

Sales Tax, Orissa,

Cuttack 117.89

4. Orissa VAT VAT 2006-07 Addl. Commisioner of

Sales Tax, Orissa,

Cuttack 36.17

5. Central Sales Tax CST 2006-07 Addl. Commisioner of

Sales Tax, Orissa,

Cuttack 8.98

6. Orissa Entry tax State Entry tax 2002-03 Orissa Sales Tax

Tribunal 0.08

7. Orissa Entry tax State Entry tax 2006-07 Addl. Commisioner of

Sales Tax, Orissa,

Cuttack 3.05

8. Central Sales Tax CST 2009-10 Addl. Commisioner of

Sales Tax, Orissa,

Cuttack 23.34

9. Central service tax Service Tax 2008-10 Commissioner,

Commissionerate

Office, Bhubaneswar 137.86

10. Central Excise Tax CENVAT 2005-2009 Dy. Commissioner,

Division Office 4.96

11. Central Excise Tax CENVAT 2009-10 Dy. Commissioner,

Division Office 4.76

12. Central Excise Tax CENVAT 2008-09 Addl. Commissioner,

Commissionerate

Office, Bhubaneswar 9.17

13. Central Excise Tax CENVAT 2008-09 Asst. Commissioner,

Division Office 2.31

14. Central Excise Tax CENVAT 2005-06 Asst. Commissioner,

Division Office 1.59

15. Central Sales Tax CST 2010-11 Dy. Commissioner Of

Sales Tax 209.84

16. CST/OET CST/OET 2005-06 STO 4.24

Total 644.57

(x) The company has not any accumulated losses at the end of the financial year 31st March, 2011. And it has not incurred any cash losses in current financial year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks or debenture holders.

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund / society. Therefore, the provisions of clause of 4(xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company.

(xiv) 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 (as amended) are not applicable to the company.

(xv) The company has not given guarantees for credit facilities taken by others from Banks or Financial Institutions, the terms and conditions whereof are not prejudicial to the interest of the company.

(xvi) According to the information and explanation given to us, in our opinion, term loan availed by the company were, prima facie, applied by the company during the year under report for the purpose for which the term loans were obtained, other than temporary deployment pending applications.

(xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment and no long term funds have been used to finance short term assets except permanent working capital.

(xviii) During the year, the company has not made any preferential allotment to the parties and companies covered in the register maintained under section 301 of the Act.

(xix) The company has not issued any debentures during the year and therefore the question of creating security / charge does not arise.

(xx) According to information and explanation given to us and the records of the Company examined by us, the Company has issued and allotted 5,30,05,000 2% Non Cumulative Redeemable Preference Shares to be redeemed at premium.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For & on behalf of

A. C Gupta & Associates

Chartered Accountants

Sd/-

A.C. GUPTA

Place : New Delhi Partner

Dated : 3rd- September 2011 Membership No. 8565

---

Mar 31, 2010

We have audited the attached Balance Sheet of OCL Iron and Steel Limited as at 31st March 2010 , the Profit and Loss Account and also 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.

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

As required by the Companies (Auditors Report) Order, 2003 (as amended) by the companies (Auditors Report) (amended) order, 2004 (together the order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph 4 and 5 of the said order.

Further to our comments in the annexure referred to 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 purpose 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 of the company, 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 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) 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 31st March 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 Cash Flow Statement, of the cash flow for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE OF OCL IRON AND STEEL LIMITED FOR THE YEAR ENDED 31st March 2010.

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

(b) As explained to us, fixed assets, according to the practice of the Company, have been physically verified by the management at reasonable intervals. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) During the year, the company has not disposed off any of the fixed assets and the going concern status of the company is not affected.

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

(b) The procedure for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material & the same have been properly dealt with in the books of account.

(iii) The Company, during the year under report, has not granted / taken any loans secured or unsecured to /from the companies and joint ventures, firms or other parties covered 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, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, consumable stores, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act has been entered in the register required to be maintained under section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies act, 1956 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted public deposits within the meaning and provisions of sec 58A and 58AA of the Companies Act, 1956.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central government has prescribed maintenance of cost accounting records under section 209 (1) (d) of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been properly maintained.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) The disputed statutory dues aggregating to Rs. 267.69 lacs, that have not been deposited on account of matters pending before appropriate authorities are as under:

S.No Name of the Statute Nature of Period to which Dues it relates

1. Central Sales Tax CST 2002-03

2. Central Sales Tax CST 2004-05

3. Orissa VAT VAT 2005-06

4. Orissa VAT VAT 2006-07

5. Central Sales Tax CST1 2006-07

6. Orissa Entry tax State Entry tax 2002-03

7. Orissa Entry tax State Entry tax 2006-07

S.No Name of the Statute Forum where Amount dispute is pending (in Lacs)

1. Central Sales Tax Orissa Sales Tax Tribunal 1.00

2. Central Sales Tax Orissa Sales Tax Tribunal 79.32

3. Orissa VAT Addl. Commisioner of

Sales Tax, Orissa, Cuttack 117.89

4. Orissa VAT Addl. Commisioner of

Sales Tax, Orissa, Cuttack 49.32

5. Central Sales Tax Addl. Commisioner of

Sales Tax, Orissa, Cuttack 14.98

6. Orissa Entry tax Orissa Sales Tax Tribunal 0.08

7. Orissa Entry tax Addl. Commisioner of 5.10

Sales Tax, Orissa, Cuttack

Total 267.69



(x) As five years have not lapsed since the registration of the company, the provisions of clause 4 (x) of the Companies (Auditors Report) Order are not applicable.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks or debenture holders.

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause of 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) 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 (as amended) are not applicable to the company.

(xv) The company has not given guarantees for credit facilities taken by others from Banks or Financial Institutions, the terms and conditions whereof are not prejudicial to the interest ofthe company.

(xvi) According to the information and explanation given to us, in our opinion, term loan availed by the company were, prima facie, applied by the company during the year under report for the purpose for which the term loans were obtained, other than temporary deployment pending applications.

(xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment and no long term funds have been used to finance short term assets except permanent working capital.

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

(xix) The company has not issued any debentures during the year and therefore the question of creating security / charge does not arise.

(xx) According to information and explanation given to us and the records of the company examined by us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.



For & on behalf of A. C Gupta & Associates Chartered Accountants

Sd/- A.C. GUPTA Place : New Delhi Partner Dated : 13th August 2010 Membership No. 8565