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Auditor Report of Palco Metals Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of PALCO METALS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31,2015, and 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 Financial Statements

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

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

In our opinion and to the best of our information and according to the explanations given to us, the 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,

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2015;

b) in the case of the Profit and Loss Account, of the profit/ loss for the year ended on that date.

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

Report on other Legal and Regulatory Requirements

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

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

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

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

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

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

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

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

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note to the financial statement

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

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors' Report

Referred to in the Paragraph 1 under the heading 'Report on the Other Legal and Regulatory Requirements' of our report of even date on the standalone financial statements of the Company for the year ended March 31,2015.

I. In respect of its fixed assets:

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

b. According to the information and explanations given to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner which, in our opinion, is reasonable having regard to the size of the Company and nature of its business. No discrepancies of serious nature have been noticed by the management and almost all the items as appearing in the register have been physically verified at the end of the year.

c. During the year, The Company has not disposed of any substantial/major part of fixed assets.

II. In respect of its Inventories:

a. As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c. In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

III. In respect of loans granted and taken to / from parties covered in the register maintained u/s 189 of the Companies Act, 2013

(a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act. Therefore, the provisions of sub-clause (a) and (b) of paragraph 3(iii) of the Order are not applicable to the Company for the current year..

IV. In respect of internal control:

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 for the purchase of inventory and fixed assets and for the sale of goods. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weakness in internal control.

V. In respect of deposits from public :

In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the year. Therefore the provisions of clause 4(vi) of CARO are not applicable to the Company.

VI. In respect of maintenance of cost records:

Pursuant to rules made by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Companies Act 2013 in respect of certain manufacturing activities, as informed to us, the Company is not required to maintain cost records.

VII. In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident fund, Income tax, Wealth tax, Sales tax, Service tax, Value added tax, cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees' State Insurance, Custom Duty and Excise duty. According to the information and explanations given to us, there are no undisputed statutory dues payable in respect of Provident Fund, Employees State Insurance, Income tax, Sales-tax Wealth Tax, Custom Duty, Excise Duty, Cess which are outstanding as at 31.3.2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth tax, Customs duty and Cess which have not been deposited with the appropriate authorities on account of any dispute.

(c) According to the records of the Company, there has not been an occasion in case of the company during the year under report to transfer any sum to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956).

VIII. In respect of accumulated losses and cash losses:

The Company does not have accumulated losses as at the end of the year and the Company has not incurred any cash losses during current and the immediately preceding financial year.

IX. In respect of dues to financial institution / banks / debentures:

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

X. In respect of guarantee given for loans taken by others:

According to the information and explanations given to us, the Company has given corporate guarantee for loans taken by Palco Recycle Industries Limited from banks and financial institutions for Rs. 25.35 Crores.

XI. In respect of application of term loans:

To the best of our knowledge and belief and according to the information explanation given to us, term loans were not availed by the Company during the year.

XII. In respect of fraud :

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

For, RAHUL KAKANI & ASSOCIATES (CHARTERED ACCOUNTANTS)

-sd [RAHUL KAKANI] Partner M.NO.: - 132796

Place: -Ahmedabad Date: - 25/05/2015


Mar 31, 2014

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

Management''s Responsibility for the Financial Statement

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") r.w Sec 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation of internal control relevant to preparation and presentation of 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 31st March,2014;

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

(c) ln the case of 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, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004'' and on the basis of such checks of the books and records of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the 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) ln our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books,

c) The Balance Sheet ,Statement of Profit and Loss and cash flow statement, dealt with by this Report are in agreement with the books of account;

d) ln our opinion, the Balance Sheet, Statement of Profit and Loss, and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956r.w Sec 133 of the Companies Act, 2013;

e) On the basis of written representations received from the directors as on 31tt March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 3lttMarch, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

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

1(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

1(c) According to the information and Explanation and on examination Books of Accounts, company has not disposed off any substantial part Fixed Assets during the Year.

2(a) Company is not having any closing stock hence this point is not applicable.

2(b) There is no closing inventory in hence this clause is not applicable.

2(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3(a) There are 3 firms covered in the register maintained under section 301 of the Companies Act, 1956 to which the company has granted loans. The maximum amount involved during the year was Rs. 8.55 crores and the year-end balance of loans granted to such parties was Rs. 0.92 crores

3(b) ln our opinion, the rate of interest and other terms and conditions on which loans have been granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company. The company has given interest free advances.

3(c) The parties have repaid the principal amounts as stipulated and have been regular in the payment of interest.

3(d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956

3(e) The Company has not taken any Loans Secured or Unsecured from the other companies listed in the register maintained under section 301 of the Companies Act, 1956.

3(f) ln our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

3(g) The company have been repaying the principal amounts as stipulated and have been regular in the payment of interest.

4 ln our opinion and according to the information and explanation given to us, there are adequate internal control procedures

5(a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

5(b) ln our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts of 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.

6 As per the information and explanation given to us and as per our examination of books of accounts, the company has not taken any deposit, hence there is no contravention of the provisions of Section 58A. 58AA or any other relevant provisions of the Companies Act, 1956.

7 ln our opinion, the company has an internal audit system commensurate with the size and nature of its business

8 The Central Government has not prescribed the maintenance of cost records in respect of the Company under section 209 (1) (d) of the Companies Act, 1956.

9(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.

9(b) According to the information and explanations given to us, the following is details of litigation, which are still pending for deposit as the same is being disputed and the company has filled a case:-

Sr. Financial Forum where dispute Amount of tax no. year is pending under litigation (Rs.)

1. 2008-09 CIT(APPEALS) 1,67,680

2. 2009-10 lncome Tax Appellate 9,87,740 Tribunal

10 There are no accumulated losses. Hence this clause is not applicable.

11 ln our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders

12 The company has not granted any loans and advances on the basis of security by way of pledge of share, debentures and other securities.

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

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

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

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

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

14 ln our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

15 ln our opinion and as per the explanations given to us, the company has given a guarantee for Rs.27.50 crores for loan borrowed by Palco Recycle industries Ltd., and the terms and conditions of the guarantee given by the company for loans taken by others from bank/financial institutions, are not prejudicial to the interest of the company

16 No term loan has been taken by the company hence this clause is not applicable.

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

18 According to the information and explanations given to us and as per the records of the company, no allotment of preferential shares have been made during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956

19 The company has not issued any debentures hence this clause is not applicable.

20 No money is raised by way of public issue during the current financial year, hence this clause is not applicable.

21 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 MADHUSUDAN C. MASHRUWALA & CO. CHARTERED ACCOTJNTANTS

(U. M. MASHRUWALA) PARTNER AHMEDABAD M. No.038254 DATE: 26.05.2014 301-301, AKIK, Opp. Lions Hall, Mithakhali Six Road. Ahmedabad - 380006 Firm Reg. No. - 105717W


Mar 31, 2013

We have audited the accompanying financial statements of PALCO METALS LIMITED which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and 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 and financial performance 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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on other Legal and Regulatory Requirements

1. As required by "The Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, and on the basis such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the Order.

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

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

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

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

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

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

ANNEXURE TO THE AUDITORS REPORT

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

1 (b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

1 (c) According to the Information and Explanation and on examination of Books of Accounts, company has not disposed off any/ substantial part of Fixed Assets during the Year.

2 (a) Company is not having any closing stock hence this point is not applicable

2 (b) There is no closing inventories in hence this clause is not applicable.

2 (c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3 (a) There are three firms covered in the register maintained under section 301 of the Companies Act, 1956 to which the company has granted loans. The maximum amount involved during the year was Rs. 8.55 crores and the year-end balance of loans granted to such parties was Rs. 6.25 crores

3 (b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company. The company has given interest free advances.

3 (c) The parties have repaid the principal amounts as stipulated and the question of receiving interest does not arrise as the advances are interest free

3 (d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956

3 (e) There are three firms covered in the register maintained under section 301 of the Companies Act, 1956 from which the company has taken loans. The maximum amount involved during the year was Rs. 8.55 crores and the year-end balance of loans taken from such parties was Rs. Nil crores

3 (f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

3 (g) The company have been repaying the principal amounts as stipulated and have been regular in the payment of interest.

4 In our opinion and according to the information and explanation given to us, there are no internal control procedures

5 (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

5 (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts of 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.

6 As per the information and explanation given to us and as per our examination of books of accounts, the company has not taken any deposit, hence there is no contravention of the provisions of Section 58A. 58AA or any other relevant provisions of the Companies Act, 1956.

7 In our opinion, the company has no proper internal audit system commensurate with the size and nature of its business

8 The Central Government has not prescribed the maintenance of cost records in respect of the Company under section 209 (1) (d) of the Companies Act, 1956.

9 (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.

9 (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and Cess were in arrears, as at 31-03-2013. For a period of more than six months from the date they became payable.

10 There are no accumulated losses. Hence thi clause is not applicable.

11 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders

12 The company has not granted any loans and advances on the basis of security by way of pledge of share, debentures and other securities.

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

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

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

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

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

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

15 In our opinion as per the Explanation given to us terms and condition of the guarantee given by the company for loans taken by others from bank/financial institutions, are not prejudicial to the interest of the company.

16 No tern loan as been taken by the compaly hence this clause is not applicable.

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

18 According to the information and explanations given to us and as per the records of the company, no allotment of preferential shares have been made during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956

19 The company has not issued any debentures hence this clause is not applicable.

20 No money is raised by way of public issue during the current f.y. hence this clause is not applicable.

21 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

Place : AHMEDABAD. For MADHUSUDAN C MASHRUWALA & CO. Date : 30-05-2013 Chartered Accountants

U.M.MASHRUWALA Partner M.No - 038254 301-303,AKIK, OPP.LIONS HALL, MITHAKHALI SIX ROAD Ahmedabad- 380006 Firm Reg.No -105717W


Mar 31, 2011

We have audited the Balance Sheet of M/S PALCO METALS LTD. as at 31 March, 2011 and Profit & Loss Account and Cash Flow Statement tor the year ended on that date annexed and report that:

These financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclosed in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books (and proper returns adequate for the purposes of our. audit have been received from the branches not visited by us. The Branch Auditors Report(s) have been forwarded to us and have been appropriately dealt with);

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

(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 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on that date 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:

(1) insofar as it relates to the Balance Sheet, of the state of affairs of the Company as at 31, March 2011, and

(2) insofar as it relates to the Profit & Loss Account, of the Profit of the Company for the period ended on that date,

(3) insofar as it relates to the Cash Flow Statement, of the Cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

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

1 (b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

1 (c) According to the Information and Explanation and on examination of Books of Accounts, company has disposed off substantial part of Fixed Assets during the Year pursuant to agreement to sell.

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

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

2 (c) The company is maintaining proper records of inventory. No discrepancies were noticed on verification between the physical stocks and the book records.

3 (a) The Company has not granted any loan secured or unsecured to companies firms or other parties covered in the register maintained under Sec.301 of the Companies Act. Therefore the provisions of this clause of CARO are not applicable

3 (b) The Company has not granted any loan secured or unsecured to companies firms or other parties and hence, provisions of clause 4(iii)(b) of CARO are not applicable.

3 (c) The Company has not granted any loan secured or unsecured to companies firms or other parties and hence, provisions of clause 4(iii)(c) of CARO are not applicable.

3 (d) There is no over due amount and all the loans are squared up at the end of the year.

3 (e) The Company has taken any Loan from 2 companies listed in the register maintained under section 301 of the

Companies Act, 1956.The amount borrowed is Rs 29,61 crores and at the end of the year all liabilities have been transferred pursuant to agreement to sell business.

3 (f) In our opinion the rate of interest and the terms and conditions are prima facie not prejudicial to the interests of the company.

3 (g) At the end of the year, all liabilities transferred pursuant to agreement to sell business.

4 In our opinion an according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5 (a) According to the information and explanation given to us and as per our examination from the books of accounts, there is no such transaction in the company which is to be mentioned in the register maintained under section 301 of the Companies Act, 1956

5 (b) As there is no such transaction in the company, hence this point is not applicable.

6 As per the information and explanation given to us and as per our examination of books of accounts, the company has not taken any deposit, hence there is no contravention of the provisions of Section 58A. 58AA or any other relevant provisions of the Companies Act, 1956.

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

8 The Central Government has not prescribed the maintenance of cost records in respect of the Company under section 209 (1) (d) of the Companies Act, 1956.

9 (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.

9 (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, service tax, custom duty, excise duty and Cess were in arrears, as at 31-03-2011, for a period of more than six months from the date they became payable.

10 The company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

11 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders

12 There are no such transactions and hence this clause is not applicable,

13 In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/society.

Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

13 (a) There are no deposits accepted and hence this clause is not applicable.

13 (b) As there is no money lending business or acceptance of deposits, this clause is not applicable.

13 (c) There is no money lending business of the company and hence this clause is not applicable.

13 (d) There is no money lending business and hence this clause is not applicable,

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

15 As per the Explanation and as per the records of the company, no guarantee has been given by the company for loans taken by others.

16 As per the Explanation and as per the records of the company, the term loans taken has been applied for the purpose for which the same has been taken.

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

18 According to the information and explanations given to us and as per the records of the company, no allotment of preferential shares have been made during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956

19 The company has not issued any debentures and hence this clause is not applicable to the company.

20 No money has been raised by way of public issue during the year under consideration.

21 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.

Place : AHMEDABAD. For MADHUSUDAN C MASHRUWALA & CO Date : 27-08-2011 Chartered Accountants

U.M MASHRUWALA Partner M.NO- 038254 301-303, AKIK, OPP. LIONS HAH., NR.MITHAKHALI SIX ROAD Ahmedabad - 380006 Firm Reg.No -105717W


Mar 31, 2010

We have audited the attached Balance Sheet of PALCO METALS LIMITED as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report) (Amendment) 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 Paragraphs 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 purposes of our audit;

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

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

(IV) In our opinion, the Balance Sheet, the Profit & Loss Account and the 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 to the extent applicable;

(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, 2009 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 31 st March, 2010

(b) In the case of the Profit and Loss Account, of the PROFIT of the Company for the year ended on that date; and

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

ANNEXURE TO AUDITOR'S REPORT OF PALCO METALS LIMITED REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regards to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off any substantial fixed assets

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(III) (a) The Company has not granted any loan secured or unsecured to companies firm or other parties covered in the registered maintained under section 301 of the companies act, 1956. Therefore, the provisions of clause 4c (iii) of the companies (Auditor's report) order 2003 are not applicable to the Company.

(b) The Company has not granted any loan to companies, firm and other parties, hence the provision of clause 4 (iii) (b) of the companies (Auditor's Report) order, 2003 are not applicable to the Company.

(c) The Company has not given any loan hence the provision of clause 4 (iii) (c) of the companies (Auditor's Report) order, 2003 are not applicable to the Company.

(d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956.

(e) The Company has taken loans from two companies for Rs. 2.22 Crores covered in the registered maintained under section 301 of the companies act, 1956.

(f) In our opinion the rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the Company.

(g) As regards the loan taken the terms of repayment have not been stipulated.

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

(V) (a) The Company has not made any transaction that need to be entered in to the register maintained under section 301 of the companies act, 1956.

(b) The Company has not made any transactions with above parties which are not reasonable.

(VI) In our opinion and according to the information and explanation given to us the company has complied with the provision of section 58A 58AA or any other relevant provision of the Act and the companies (Acceptance of deposits) rule 1975 with regard to the deposits accepted from the public.

(VII) In our opinion, the company has no internal audit system commensurate with the size and nature of its business.

(VIII) The provisions of Section 209(1) (d) of the Companies Act, 1956 regarding maintenance of cost records are not applicable to the Company

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

(b) According to the records of the company as act 31st March, 2010 the following are the perticulars of disputed dues on account of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty and cess which have not been deposited

Name of the Nature of Dues Amount Forum where dispute Statute Rs. In Lacs is pending

Central Central Excise 12.79 Commisioner of Excise Central Excise

(X) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately proceeding financial year.

(XI) Based on our audit procedures and as per the information and explanation given to us we are of the opinion that the company has not defaulted in repayment of dues to banks.

(Xll) The Company has not granted any loans and advances on the basis of security by way of pledge of shares

(XIII) In our opinion, the company is not a chit fund or a Nidhi mutual benefit fund / society. Therefore the provision of clauses 4 (xiii) of the order 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 clauses (vix) of the order are not applicable to the Company

(XV) The Company has not given guarantees for loans taken by others from banks or financial institutions.

(XVI) The Company has not taken any term loan,

( XVII) No funds have been raised on short term basis and no long term investment has been made from it.

(XVIII) The Company has not issued any shares hence there is no preferential allotment.

(XIX) The Company has not issued any debenture.

( XX ) The Company has not raised money from public issue.

(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.

PLACE : AHMEDABAD For, MADHUSUDAN C. MASHRUWALA & CO. (CHARTERED ACCOUNTANTS)

DATE: 03-08-2009 (U.M. MASHRUWALA) PARTNER MEMBERSHIP NO.: 38254 Firm Regisration No. 105717W

 
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