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Auditor Report of Rathi Steel & Power Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Rathi Steel And Power Limited ('the Company'), which comprise the balance sheet as at 31st March 2015, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its 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, 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 the 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 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 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 the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2 to the Notes to Accounts attached to financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any; and

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

1. In respect of fixed assets:

a) The company has been maintaining details showing full particulars, including quantitative details of fixed assets.

b) We have been informed that physical verification of fixed assets has been conducted by the management at reasonable intervals and no material discrepancies have been noticed by them.

c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

2. In respect of inventories:

a) According to the information and explanations given to us, the physical verification has been conducted at reasonable intervals by the management of the stock of stores. The physical verification of finished goods (excluding stocks lying with third parties) and raw material has been done on estimation basis, from time to time, due to the nature of the business and the cost involved and no discrepancies have been found. In respect of goods inventory lying with third parties, these have substantially been confirmed by them.

b) In our opinion, the procedures of physical verification of stocks followed by the management, is commensurate with the size of the company and nature of its business.

c) Having regard to the size of operations, no material discrepancies have been noticed on physical verification as compared to books of account and minor discrepancies found, have been properly dealt with in the books of account.

3. The Company has not granted loans to bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

4. In our opinion and according to the information and explanations given to us, the internal control procedures needs to be strengthened in order to be commensurate with the size of the company and the nature of its business.

5. The Company has not accepted any deposits from the public.

6. We have broadly reviewed the records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and on the basis of our examination of the records, Company has been generally regular in depositing with appropriate undisputed statutory dues i.e. income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other statutory dues authoritieswherever applicable. However there are some minor delay in payment of dues for provident fund and Employees State Insurance but there are no over dues for the financial year.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable except the sales tax liability/ VAT Liability/Entry Tax/Excise duty/Service Tax/other statutory dues amounting to Rs.8.74crores.

(b) According to the information and explanations given to us, there are no unstayed disputed statutory dues.

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

8. The accumulated losses of the Company at the end of the year are more than 100% of its net worth. The Company has incurred cash losses during the year covered by report as well as cash losses in the immediately preceding financial year.

9. The Company has defaulted in repayment of dues to financial institutions, banks or debenture holders during the year. The amount and period of default is as under:

Nature of Period Amount Remarks Default (days) (Rs. in Crores)

Principal 0-31 4.68 Due on Repayments 28.02.2015

Interest 0-120 7.53

Bank Guarantee 0.78 Invoked

Total 12.99

10. In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

11. No term loan has been raised during the year under review.

12. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For M. LAL & CO. Chartered Accountants

Sd/- Place: New Delhi M. L. AGRAWAL Dated :15.06.2015 M. No.: 11148








Mar 31, 2014

We have audited the accompanying financial statements of M/s RATHI STEEL AND POWER LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

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

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 suffcient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

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

(c) In the case of the Cash Flow Statement, of the cash flows

for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of profit and Loss, and Cash Flow Statement comply with the Accounting Standards notifed under the Act read with the General Circular 15/2013dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

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

As required by the Companies (Auditors'' Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (herein referred to as "the Order") issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956. We further report that:- 1. In respect of fixed assets:

a) The company has been maintaining details showing full particulars, including quantitative details of fixed assets.

b) We have been informed that physical verifcation of fixed assets has been conducted by the management at reasonable intervals and no material discrepancies have been noticed by them.

c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

2. In respect of inventories:

a) According to the information and explanations given to us, the physical verifcation has been conducted at reasonable intervals by the management of the stock of stores. The physical verifcation of fnished goods (excluding stocks lying with third parties) and raw material has been done on estimation basis, from time to time, due to the nature of the business and the cost involved and no discrepancies have been found. In respect of goods inventory lying with third parties, these have substantially been confirmed by them.

b) In our opinion, the procedures of physical verifcation of stocks followed by the management, is commensurate with the size of the company and nature of its business.

c) Having regard to the size of operations, no material discrepancies have been noticed on physical verifcation as compared to books of account and minor discrepancies found, have been properly dealt with in the books of account.

3. The company has not taken or granted loans from/to parties listed in the register maintained under Section 301 of the Companies Act, 1956 and from the Companies under the same management as Defined under sub- section (1b) of Section 370 of the Companies Act, 1956. Therefore the provisions of clause (iii) of paragraph 4 of the Order are not applicable to the Company.

4. In our opinion and according to information and explanation given to us, the internal control procedures needs to be strengthened in order to be commensurate with the size of the company and the nature of its business.

5. According to the information and explanations given to us, the company has not entered into contract or arrangement for purchase and sale of goods and materials with parties entered in the registers maintained under Section 301. Therefore the provisions of clause (v) of paragraph 4 of the Order are not applicable to the Company.

6. The Company has not accepted any deposits from public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under. Therefore the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

7. The company has an internal audit system, which, in our opinion, needs to be further strengthened and requires to cover more areas looking after the size of the company and the nature of its business.

8. We have broadly reviewed the records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete

9. According to the information and explanations given to us in respect of statutory and other dues:

a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance contributions, Income Tax, Sales tax/ VAT, Wealth Tax, Service Tax, Custom duty ,Cess and any other material statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed statutory dues payable for a period more than six months from the date they became payable as at 31.03.2014 except the sales tax/VAT liability/Entry Tax amounting to Rs.7.06 crores.

b) According to the books and records as produced and explanation given to us, there are no un-stayed disputed statutory dues.

10. The accumulated losses of the Company at the end of the year are more than 50% of its net worth. The Company has incurred cash losses during the year covered by report as well as cash losses in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us and in view of the fact the approved CDR Scheme has since been implemented and installments of TL/WCTL/FITL under moratorium and as such the Company has not defaulted in repayment of dues to any banks/Financial Institutions as at the balance sheet date.

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

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

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures, except in long term investments in shares and has been held by the company in its own name.

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

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term investment. Similarly, no funds raised on long-term basis have been used for short term investment.

18. The company has made preferential allotment of preference shares during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing standards in India and as per the information and explanations given to us, we have not come across any instance of fraud, either noticed or reported during the year on or by the company.

For M. LAL & CO. Chartered Accountants

Sd/- Place: New Delhi M. L. AGRAWAL Dated :30.05.2014 M. No.: 11148


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of M/s RATHI STEEL AND POWER LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows 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 fnancial 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 fnancial 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 fnancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements. We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Opinion

Without qualifying our opinion, we draw attention to Note No 6 to the fnancial statements, regarding the preparation of the same on a going concern basis. The Company incurred a net loss of Rs. 110.05 Crores during the year ended March 31, 2013 and, as of that date, the Company''s current liabilities exceeded its current assets by Rs.129.60 Crores, while the Company''s net worth remains positive as at the balance sheet date. In view of proposed plan to restructure the Company''s debt profle to convert majority of their short term loan to long term loan ,these fnancial statements have been prepared on a going concern basis and no adjustment has been made to the carrying value of the assets and liabilities.

In our opinion and to the best of our information and according to the explanations given to us, the fnancial 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 Proft and Loss Account, of the loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifed 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 Proft and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account

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

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed 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.

As required by the Companies (Auditors'' Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (herein referred to as "the Order") issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956. We further report that:- 1. In respect of fxed assets:

a) The company has been maintaining details showing full particulars, including quantitative details of fxed assets.

b) We have been informed that physical verifcation of fxed assets has been conducted by the management at reasonable intervals and no material discrepancies have been noticed by them.

c) In over opinion, a substancial part of fxed assets has not been disposed off during the year.

2. In respect of inventories:

a) According to the information and explanations given to us, the physical verifcation has been conducted at reasonable intervals by the management of the stock of stores. The physical verifcation of fnished goods (excluding stocks lying with third parties) and raw material has been done on estimation basis, from time to time, due to the nature of the business and the cost involved and no discrepancies have been found. In respect of goods inventory lying with third parties, these have substantially been confrmed by them.

b) In our opinion, the procedures of physical verifcation of stocks followed by the management, is commensurate with the size of the company and nature of its business.

c) Having regard to the size of operations, no material discrepancies have been noticed on physical verifcation as compared to books and accounts and minor discrepancies found, have been properly dealt with in the books of accounts.

3. The company has not taken or granted loans from/to parties listed in the register maintained under Section 301 of the Companies Act, 1956 and from the Companies under the same management as defned under sub- section (1b) of Section 370 of the Companies Act, 1956.

4. In our opinion and according to information and explanation given to us, the internal control procedures needs to be strengthened in order to be commensurate with the size of the company and the nature of its business.

5. According to the information and explanations given to us, the company has not entered into contract or arrangement for purchase and sale of goods and materials with parties entered in the registers maintained under Section 301.

6. The Company has not accepted any deposits from public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

7. The company has an internal audit system, which, in our opinion, requires to cover more areas looking after the size of the company and the nature of its business.

8. We have broadly reviewed the records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. According to the information and explanations given to us in respect of statutory and other dues:

a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance contributions, Income Tax, Sales tax/VAT, Wealth Tax, Service Tax,Custom duty ,Cess and any other material statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed statutory dues payable for a period more than six months from the date they became payable as at 31.03.2013 except the sales tax/ VAT liability amounting to Rs. 4.52 crores.

b) According to the books and records as produced and explanation given to us, there are no un-stayed disputed statutory dues.

10. The accumulated losses of the Company at the end of the year are more than 50% of its net worth. The Company has incurred cash losses during the year covered by report but has not incurred cash losses in the immediately preceding fnancial year.

11. According to the records of the Company examined by us and the information and explanations given to us, other than dues to fnancial institutions, banks for the period from 01.12.2012 to 31.03.2013 aggregating Rs.10.45 crores towards principal and Rs. 9.36 crores towards interest and Rs. 50.57 crores towards bills crystallized, the Company has not defaulted in repayment of dues to any fnancial institution or bank as at the balance sheet date.

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

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

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures, except in long term investments in shares and has been held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guaranty for loans taken by others from banks or fnancial institutions.

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term investment. Similarly, no funds raised on long-term basis have been used for short term investment. However, short term fund have been used for funding losses to the company.

18. The company has not made any preferential allotment of shares/ convertible shares/ warrants during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing standards in India and as per the information and explanations given to us, we have not come across any instance of fraud, either noticed or reported during the year on or by the company.



For M. LAL & CO.

Chartered Accountants



Sd/-

Place: New Delhi M. L. AGRAWAL

Dated :04.09.2013 M. No.: 11148


Mar 31, 2012

We have audited the attached Balance Sheet of M/s RATHI STEEL AND POWER LIMITED, as at 31st March, 2012 and the Profit and Loss Account and 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.

A. We report that:

1. 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.

2. 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.

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

4. In our opinion, the Balance Sheet and the 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.

5. On the basis of written representation received from the directors as on 31st March, 2012 and taken on record by the Board of directors we report that none of directors is disqualified as on 31st March, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 and

ii) in the case of the Profit & Loss Account, of the profit for the year ended on that date and

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

B. As required by the Companies (Auditors' Report)

Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (herein referred to as "the Order") issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956. We further report that:-

1. In respect of fixed assets:

a) The company has been maintaining details showing full particulars, including quantitative details of fixed assets.

b) We have been informed that physical verification of fixed assets has been conducted by the management at reasonable intervals and no material discrepancies have been noticed by them.

c) No part of the fixed assets has been disposed off during the year.

2. In respect of inventories:

a) According to the in for mationand explanations given to us, the physical verification has been conducted at reasonable intervals by the management of the stock of stores. The physical verification of finished goods and raw material has been done on estimation basis, from time to time, due to the nature of the business and the cost involved and no discrepancies have been found.

b) In our opinion, the procedures of physical verification of stocks followed by the management, is commensurate with the size of the company and nature of its business.

c) Having regard to the size of operations, no material discrepancies have been noticed on physical verification as compared to books and accounts and minor discrepancies found, have been properly dealt with in the books of accounts.

3. According to the information and explanations given to us:

The company has not taken for granted loans from parties listed in the register maintained under Section 301 of the Companies Act, 1956 and from the Companies under the same management as defined under sub-section (1b) of Section 370 of the Companies Act, 1956.

4. In our opinion and according to information and explanation given to us, there are internal control procedures commensurate with the size of the company and the nature of its business.

5. According to the information and explanations given to us, the company has not entered into contract or arrangement for purchase and sale of goods and materials with parties entered in the registers maintained under Section 301.

6. According to the information and explanations given to us, the company has complied with the provisions of Section 58A of the Companies Act, 1956.

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

8. We have broadly reviewed the records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records.

9. According to the information and explanations given to us in respect of statutory and other dues:

a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance contributions, Income Tax, Sales tax, Wealth Tax, Service Tax, Custom duty ,CASs and any other material statutory dues applicable to it. According to the information and explanations given to us, there are no undisputed statutory dues payable for a period more than six months from the date they became payable as at 31.03.2012.

b) According to the books and records as produced and explanation given to us, there are no un-stayed disputed statutory dues.

10. Company does not have accumulated losses at the end of the financial year. Company has not incurred cash losses during the year covered by report and in the financial year immediately preceding the year covered by the report.

11. In our opinion and according to the information and explanations given to us, the company had not defaulted in repayment of dues to banks.

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

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

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures, except in long term investments in shares and has been held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guaranty for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term investment. Similarly, no funds raised on long-term basis have been used for short term investment.

18. The company has not made any preferential allotment of shares/ convertible shares/ warrants during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing standards in India and as per the information and explanations given to us, we have not come across any instance of fraud, either noticed or reported during the year on or by the company.

Sd/-

For M. LAL & CO.

Chartered Accountants

Sd/-

M. L. AGRAWAL M. No.: 11148

Place: New Delhi

Dated :27.08.2012


Mar 31, 2011

We have audited the attached Balance Sheet of M/s Rathi Steel And Power Limited as at 31st March, 2011 and the Proft and Loss Account and Cash Flow Statement of the Company 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.

a. We report that:

1. 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.

2. 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.

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

4. In our opinion, the Balance Sheet and the 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.

5. On the basis of written representation received from the directors as on 31st March, 2011 and taken on record by the Board of directors we report that none of directors is disqualified as on 31st March, 2011 from being appointed as director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

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

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 and

ii) In the case of the Profit & Loss Account, of the profit for the year ended on that date and

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

B. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order,2004 (herein referred to as "the Order")issued by the Government of India in terms of Section 227(4A) of the Companies Act,1956, we further report that:-

1. In respect of fixed assets:

a) The company has been maintaining details showing full particulars, including quantitative details of fixed assets.

b) We have been informed that physical verification of fixed assets has been conducted by the management at reasonable intervals and no material discrepancies have been noticed by them.

c) No part of the fixed assets has been disposed off during the year.

2. In respect of Inventories:

a) According to the information and explanations given to us, the physical verification has been conducted at reasonable intervals by the management of the stock of stores. The physical verification of finished goods and raw material has been done on sample basis, from time to time, due to the nature of the business and the cost involved and no discrepancies have been found.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of stocks followed by the management were reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanations given to us, no material discrepancies have been noticed on physical verification as compared to books of account and minor discrepancies found, if any, have been properly dealt with in the books of account.

3. According to information and explanation given to us:

a) The company has not taken or granted loans from parties listed in the register maintained under Section 301 of the Companies Act, 1956 and from the Companies under the same management as defined under sub-section (1b) of Section 370 of the Companies Act, 1956.

b) No interest has been paid on such loans and prima facie these are not prejudicial to the interest of the company.

c) Loans and advances in the nature of loans to staff, given by the company, stipulate the consideration regarding the terms of repayment and the same are being recovered accordingly.

d) No time period has been stipulated on the loans taken by the company.

4. In our opinion and according to information and explanation given to us, there are internal control procedures, except for freight accounting which requires improvement, commensurate with the size of the company and the nature of its business.

5. According to the information and explanations given to us, the company has not entered into contract or arrangement for purchase and sale of goods and materials with parties entered in the registers maintained under Section 301.

6. According to the information and explanations given to us, the company has complied with the provisions of Section 58A of the Companies Act, 1956.

7. The company has an internal audit system commensurate with the size and nature of business.

8. No cost record has been prescribed under Section 209 (i) (d) of the Companies Act, 1956.

9. According to the information and explanations given to us in respect of statutory and other dues:

a) According to books and records as produced and examined by us and as per information and explanations given to us, undisputed statutory dues in respect of Provident Fund, Employees State Insurance contributions, Income Tax, Sales Tax, Excise Duty, Cess and other statutory dues have been regularly deposited during the year with appropriate authorities.

b) According to books and records as produced and explanation given to us, there are no un-stayed disputed statutory dues.

10. Company does not have accumulated losses at the end of the financial year. Company has not incurred cash losses during the year covered by report and in the financial year immediately preceding the year covered by the report.

11. In our opinion and according to the information and explanations given to us, the company had not defaulted in repayment of dues to banks.

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

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

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures, except in long term investments in shares and has been held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us, no funds raised on short-term basis have been used for long term investment. Similarly, no funds raised on long-term basis have been used for short term investment.

18. The company has made preferential allotment of shares/Convertible share warrants during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing standards in India and as per the information and explanations given to us, we have not come across any instance of fraud, either noticed or reported during the year on or by the company.

For M. Lal & Co. Chartered accountants Sd/- M .L agarwal M.No.11148

Place : New Delhi Date : 23.08.2011

 
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