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Auditor Report of Steelco Gujarat Ltd.

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of Steelco Gujarat 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 the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditors' 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 evidences about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' 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 of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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.

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:

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

(b) in the case of the Statement of 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.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:

(a) Note No. 36 in the financial statements which indicates that the Company has accumulated losses and its net worth has almost been eroded, the Company has incurred a net loss during the current and previous year(s) and, the Company's current liabilities exceeded its current assets and other adverse financial parameters as at the balance sheet date. These conditions, along with other matters set forth in Note No. 36, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.

Our opinion is not modified in respect of these matters.

Other Matters

We draw attention to the following matters in the Notes to the financial statements:

(a) Note No. (1) of Note No. 10 relating to "Fixed Assets" regarding adopting disclosure of fixed assets at its historical costs in place of revalued amount of fixed assets and consequential lower charge of depreciation by Rs. 543.02 for the year and higher net block of fixed assets as at 31st March, 2015;

(b) Note No. (2) of Note No. 10 relating to "Fixed Assets" regarding change in the method of depreciation from Written down value method to Straight Line method and consequential write back of excess provision of depreciation of earlier years amounting to Rs. 868.85 and lower charge of depreciation for the year amounting to Rs. 15.33 Lacs resulting into loss being lower by Rs. 884.18 lacs for the reporting period and net block of fixed assets being higher by an equivalent amount as at 31st March, 2015;

(c) Note No. (3) of Note No. 10 relating to "Fixed Assets" regarding higher useful life of certain fixed assets than as is prescribed under Schedule – II to the Companies Act, 2013 and consequential lower charge of depreciation by Rs. 290.09 for the year and higher net block of fixed assets as at 31st March, 2015;

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 paragraphs 3 and 4 of the Order.

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

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 Standalone Financial Statements 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.; and

(e) The going concern matter described under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31st March, 2015 and 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.

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

a. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 19 to the financial statements;

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

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

Annexure referred to in the Independent Auditors' Report

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable, having regard to the size of the Company and nature of its business.

(b) In our opinion, the procedures for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause (iii)(b) to (iii)(d) of paragraph of the Order are not applicable to the company for the current year.

4. In our opinion, there is an adequate internal control system 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 and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

5. The Company has not accepted any deposits from the Public within the meaning of the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder. Further, we are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any other Court or Tribunal.

6. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under sub-section 1 of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost 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 books of account, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth tax, Service tax, Custom duty, Excise duty, Value added Tax, Cess and any other material statutory dues during the year with the appropriate authorities. Moreover, as at 31st March, 2015, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the particulars of dues of Income tax, Sales tax, Excise duty and Service tax and other material statutory dues as at 31st March, 2015 which have not been deposited on account of any dispute, are as follows:

Name of the Statute Nature of dues Amounts involved Period to which Forum where (Rs. in Millions) the amount relates dispute is pending

The Income Tax Act,1961 Income Tax 24.45 1991-92 H'nable Gujarat High Court

Income Tax 26.03 1992-93 H'nable Gujarat High Court

Income Tax 61.55 1993-94 H'nable Gujarat High Court

Customs Act Custom Duty 32.66 2008-09 CESTAT, Ahmedabad

(c) According to the information and explanations given to us, the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder, has been transferred to such fund within time.

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

9. The company has made delays at times in repayment of dues to financial institutions or banks.

10. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees / letter of comforts given by the company for loans taken by the subsidiaries and other parties from banks are not prima facie, prejudicial to the interest of the company.

11. Term loans obtained by the company were applied for the purposes for which the loans were obtained.

12. To the best of our knowledge and based on information and explanations received from the management, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For MUKESH M. SHAH & CO.

CHARTERED ACCOUNTANTS

Firm Registration No. 106625W

PARTNER

Place:Mumbai Chandresh S. Shah

Date :28th May, 2015 Membership No. 42132


Mar 31, 2014

1. Report on the Financial Statements :

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

2. Management''s Responsibility for the Financial Statements :

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards 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.

3. Auditors'' Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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.

4. 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

ii. in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

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

5. Emphasis of Matter :

Attention of the members is invited to Note No. 35 regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is substantially eroded. The appropriateness of the said basis is interalia dependent upon the fulfillment of terms and conditions of approved Corporate Debt Restructuring ["CDR"] package by Corporate Debt Restructuring Cell of Reserve Bank of India vide its approval letter dtd. June 27, 2012 and company''s ability to raise requisite finance and/or generate cash flows in future to meet its commitment of future revival plans and for continuing operations.

6. Report on Other Legal and Regulatory Requirements :

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

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

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

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the company and taking into consideration, the information and explanation given to us in the normal course of audit, we report that:

1. (a) The Company has maintained proper records to show the particulars including quantitative details and situation in respect of the fixed assets.

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

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

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

(c) The Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies were noticed on physical verification of inventory.

3. (a) The Company has not taken unsecured loan from the company, in which directors are interested, listed in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b), (iii-c) and (iii-d) of paragraph 4 of the order are not applicable.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and 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, during the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

5. In our opinion, the transactions that need to be entered into the register maintained under section 301 have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 and exceeding the value of five lakh rupees 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. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the Public within the meaning of the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder. Further, we are informed that no order has been passed by the Company Law Board.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance dues, Income-tax, Sales-tax, Wealth tax, Service Tax, Customs duty, Excise duty, cess and any other dues during the year with the appropriate authorities. There are no cases of non-deposit of any undisputed statutory dues outstanding for a year of more than six months as at 31st March, 2014 from the date they became payable.

(b) According to the information and explanations given to us, there are no cases of non-deposit with appropriate authorities of disputed dues of sales tax, income-tax, customs duty, wealth tax, excise duty and cess except the following:

10. The accumulated losses at the end of the financial year are more than 50% of its net worth. The Company has not incurred cash losses in the financial yearas well as in the immediately preceding financial year.

11. The company has made delays at times in repayment of dues to financial institutions or banks.

12. The company had not granted any loans on the basis of security by way of pledge of shares, debentures or other securities.

13. The company is not a chit fund/nidhi/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 and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantees or provided any security in respect of borrowings taken by others from banks and financial institutions.

16. Term loans obtained by the Company were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash-flow statement and other records, we report that no funds raised on short term basis have prima facie, been used during the year for long term investment and vice versa.

18. The company has not made any preferential allotment to any parties, firms and/or companies covered in the register maintained under section 301 of the Companies Act, 1956. Hence, there does not arise any question of an enquiry of the price of the issue to ascertain whether the same is, prima facie, prejudicial to the interest of the Company.

19. The Company has not issued any debentures hence; question of creating securities does not arise.

20. The company has not raised any money by public issues during the year.

21. 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 was noticed or reported during the year.

For MUKESH M. SHAH & CO. CHARTERED ACCOUNTANTS Firm Registration No. 106625W

PARTNER Place : Ahmedabad. Chandresh S. Shah Date : 27th May, 2014 Membership No. 42132


Mar 31, 2013

1. Report on the Financial Statements :

We have audited the accompanying financial statements of STEELCO GUJARAT LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. Managements'' Responsibility for the Financial Statements :

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

3. Auditors'' Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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 auditors'' judgment, including the assessment of the risks of m aterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Companys'' preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys'' internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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.

4. 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

ii. in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

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

5. Emphasis of Matter :

Attention of the members is invited to Note No. 34 regarding the financial statements of the Company haveienng b prepared on a going concern basis, notwithstanding the fact that its net worth is substantialley d e. rTohde appropriateness of the said basis is interalia dependent upon the fulfillment of terms and cons d oi tfi oanpproved Corporate Debt Restructuring ["CDR"] package by Corporate Debt Restructuring Cell of Reserve B aInkd i oa fvide its approval letter dtd. June 27, 2012 and companys'' ability to raise requisite finance and/or genecra st eh flows in future to meet its commitment of future revival plans and for continuing operations.

6. Report on Other Legal and Regulatory Requirements :

i. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by the Central Gov ernment in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. ii. 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 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

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

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the company and taking into consideration, the information and explanation given to us in the normal course of audit, we report that:

1. (a) The Company has maintained proper records to show the particulars including quantitative details and situation in respect of the fixed assets.

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

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

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

(c) The Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies were noticed on physical verification of inventory.

(b) The rate of interest and other terms and condition of these loans are not prima facie prejudicial to the interest of the Company.

(c) The Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b), (iii-c) and (iii-d) of paragraph 4 of the order are not applicable.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and 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, during the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

5. In our opinion, the transactions that need to be entered into the register maintained under section 301 have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 and exceeding the value of five lakh rupees 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. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the Public within the meaning of the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder. Further, we are informed that no order has been passed by the Company Law Board.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the

Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees''State Insurance dues, Income-tax, Sales-tax, Wealth tax, Service Tax , Customs duty, Excise duty, Cess and any other dues during the year with the appropriate authorities. There are no cases of non-deposit of any undisputed statutory dues outstanding for a period of more than six months as at 31st March, 2013 from the date they became payable.

10. The accumulated losses at the end of the financial year are more than 50% of its net worth. The Ca noym phas not incurred cash losses in the financial yebaurt it has incurred cash losses in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to financial institutions or banks, pursuant to approval of Corporate Debt Restructuring [CDR] package by the CDR Cell.

12. The Company had not granted any loans on the basis of security by way of pledge of shares, debentures or other securities.

13. The Company is not a chit fund/nidhi/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 and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantees or provided any security in respect of borrowings taken by others from banks and financial institutions.

16. Term loans obtained by the Company were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash-flow statement and other records, we report that no funds raised on short term basis have prima facie, been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to any parties, firms and/or companies covered in the register maintained under section 301 of the Companies Act, 1956. Hence, there does not arise any question of an enquiry of the price of the issue to ascertain whether the same is, prima facie, prejudicial to the interest of the Company.

19. The Company has not issued any debentures, hence question of creating securities does not arise.

20. The Company has not raised any money by public issues during the year.

21. 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 was noticed or reported during the year.

For MUKESH M. SHAH & CO.

CHARTERED ACCOUNTANTS

Firm Registration No. 106625W

PARTNER

Place : Ahmedabad. Chandresh S. Shah

Date : 22nd May, 2013 Membership No. 42132


Mar 31, 2012

We have audited the attached Balance Sheet of Steelco Gujarat Limited (‘the company') as at 31st March, 2012, and also the Statement of Profit & Loss and Cash Flow Statement for the period 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 Jndia. 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 applied 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 section 227(4A) of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph 4 of the said Order.

Attention of the members is invited to Note No. 34 regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is substantially eroded. The appropriateness of the said basis is interalia dependent upon the approval of CDR proposal and company's ability to raise requisite finance or generate cash flows in future to meet its future revival plans and for continuing operations.

Further to our comments in the Annexure referred to above, 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 it appears from our examination of the books. .

(c) the Balance Sheet and Profit and l oss account 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 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; 1

(e) on the basis of the written representations received from directors of the company and taken on record by the Board of Directors we report that no director is disqualified as on 3.1st March, 2012 from being appointed as a director in terms of clause (g) ol sub-section (1) of section 274 of the Companies Act, 1956; and

(f) in our opinion, and to best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes ih.eieon; more particularly Note No. 13 regarding change in the accounting policy in respect of inventory valuation and its consequential effects on the loss for the period and inventories, give the information required by the Companies Act, 1956, in the manner so required and give a true an 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;

(ii) in the case of the Statement of Profit and Loss for the period, of the loss for the period ended on that date; and

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

With reference to the Annexure referred to in the Auditors’ Report to the Members of Steelco Gujarat Limited on the accounts for the period ended 31st March, 2012, we report that:

1. (a) The Company has maintained proper records to show the particulars including quantitative details and situation in respect of the fixed assets.

(b) Some of tho fixed assets were physically verified during the period by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification. ¦

(c) Fixed assets disposed off during the pciod were not substantial and therefore does ndt atfoct the going concern assumption

2. (a) The inventory has been physically verified by management during this period. In our opinion, tho frequency of such verification h leasonable.

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

(c) The 'Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies were noticed on physical verification of inventory.

3- (a) The Company has not taken any loan, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b), (iii-c) and (iii-d) of paragraph 4 of the order are not applicable.

(b) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b), (iii-c) and (iii-d) of paragraph 4 of the order are not applicable.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and 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 weaknesses in internal control. ,

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of 'contracts or arrangements entered in the registers maintained under Section 301 and exceeding the value of Rs. 5,00,000/' in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the Public within the meaning of the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under. Further, we are informed that no order has been passed by the Company Law Board.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the order rhade by the Central Government for the maintenance of the cost records and are of the opinion that prima facie, the prescribed afccounts and records have been made and maintained.

9. (a) According to the information ana explanations given to us and on the basis or our examination of the books of account, the

company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance dues, Income-tax, Sales-tax, Wealth tax, Service Tax, Custom duty, Excise duty, cess and any other dues during the period with the appropriate authorities. There are no cases of non-deposit of any undisputed statutory dues outstanding for a period of more than six months as at 31st March, 2012 from the date they became payable.

(b) According to the information and explanations given to us, there are no cases of non-deposit with appropriate authorities of disputed dues of saleis tax, income-tax, customs duty, wealth tax, excise duty and cess except the following:

Financial period to Act Nature of dues Forum where dispute Amount which it relates is pending (Rs.in Lacs)

2008-2009 Customs Act Customs Duty CESTAT Ahmedabad 32.71

2009-2010 Central Excise Act Excise duty interest CESTAT, Ahmedabad 0.70 and Service Tax

1991 - 1992 income Tax Act, 1961 Income Tax H nable Gujarat High Court 24.45 1992- 1993 Income Tax Act, 1961 Income Tax H'nable Gujarat High Court 26.03

1993 - 1994 Income Tax Act, 1961 Income Tax H'nable Gujarat High Court 61.55

10. The accumulated losses at the end of the financial period are more than 50% of its net worth. Moreover, the Cjmpany has incurred cash losses in the financial period but it has not incurred cash losses in the immediately preceding financial period.

11. Based on our audit procedures and as per the information and according to the explanations given to us, delays were noticed in payment of interest & principal on few occasions during the year.

12. The company had not granted any loans against pledge or security of shares. '

13. The company is not a chit fund/nidhi/mutual benefit fund/society.

14. According io the on and company is not aeaiing er trading in shares, securities debenture and other

15. According to the information and explanations given to us, the Company has not given any guarantees or provided any security in respect of borrowings taken by others from banks and financial institutions.

16. Term loans obtained by fhe Company were aocfied curocse were obtained.

17. According to the statement and other records, we report that ro 'unc's raised save for long term investment and vice versa.

18. The company has not made any preferential allotment to any parties, firms and/or companies covered in the register maintained under section 301 of the Companies Act, 1956. Hence, there does not arise any question of an enquiry of the price of the issue to ascertain whether the same is, prima facie, prejudicial to the interest of the Company.

19. The Company has not issued any debentures hence: question of creating securities does not arise.

20. The company has not raised any money by public issues during the period. '

21. 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 was noticed or reported durina the period.

For MUKESH M. SHAH & CO. CHARTERED ACCOUNTANTS

Firm Registration No. 106625W

PARTNER

Place : Ahmedabad. Chandresh S. Shah

Date : 31st June, 2012 Membership No. 42132


Mar 31, 2011

We have audited the attached Balance Sheet of Steelco Gujarat Limited ('the company') as at 31st March, 2011, and also 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 applied 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 section 227(4A) of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph 4 of the said Order.

(a) on the basis of the written representations received from directors of the company and taken on record by the Board of Directors, we report that no director is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956; and

Further to our comments in the Annexure referred to above, we report that:

(b) 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;

(c) 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 the books;

(d) 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;

(e) in our opinion, the Balance Sheet and 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;

(f) in our opinion, and to best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true an 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;

(ii) in the case of the Profit and 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.

Annexure to the Auditors' Report

With reference to the Annexure referred to in the Auditors' to the Members of Steelco Gujarat Limited on the accounts for the year ended 31st March, 2011, we report that:

1. (a) The fixed assets register maintained by the Company is required to be updated.

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of Verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the period were not substantial and therefore do not affect the going concern assumption.

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

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

(c) The Company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies were noticed on physical verification of inventory.

3. a) The unsecured loans taken and repaid during the year by the Company from a director are as under:

(Rs. in lacs)

Name of Party Relationship Amount taken Amount repaid during the year during the year

Mr. Mahendra Non-Executive 0.00 889.08 Lodha Independent Director

Name of Party Year ended Balance

Mr. Mahendra 0.00 Lodha

b) The rate of interest and other terms and conditions of these loans are not prima facie prejudicial to the interest of the company.

c) No amount is overdue.

4. The Company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b), (iii-c) and (iii-d) of paragraph 4 of the order are not applicable.

5. 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 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 weaknesses in internal control.

6. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 and exceeding the value of five lakh rupees 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.

7. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the Public within the meaning of the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under. Furthar, we are informed that no order has been passed by the Company Law Board.

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

9. We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

10. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance dues, Income-tax, Sales-tax, Wealth tax, Service Tax, Custom duty, Excise duty, cess and any other dues during the period with the appropriate authorities. There are no cases of non-deposit of any undisputed statutory dues outstanding for a period of more than six months as at 31st March, 2011 from the date they became payable.

(b) According to the information and explanations given to us, there are no cases of non-deposit with appropriate authorities of disputed dues of sales tax, income-tax, customs duty, wealth tax, excise duty and cess except the following:

Financial Act Nature or dues Forum where period to dispute which it is pending relates

2006 - 2009 Customs Act Customs Duty CESTAT, Ahmedabad

2009-2010 Central Excise Excise duty and Commissioner of Act interest Central Excise (Appeals)

2010-2011 Central Excise Act Excise duty, Commissioner of and Service Tax Service Tax Central Excise and Interest (Appeals)

1991-1992 Income Tax Act, Income Tax H'nable Gujarat 1961 High Court

1992 - 1993 Income Tax Act, Income Tax H'nable Gujarat 1961 High Court

1993-1994 Income Tax Act, Income Tax H'nable Gujarat 1961 High Court

2006-2007 Income Tax Act, Income Tax Commissioner of 1961 Income Tax (Appeals)

Financial Amount period to (Rs. in which it Lacs) relates

2006 - 2009 32.69

2009-2010 10.00

2010-2011 19.21

1991 - 1992 24.45

1992-1993 26.03

1993-1994 61.55

2006 - 2007 8.32

11. The accumulated losses at the end of the financial period are more than 50% of its net worth. Moreover, the Company has not incurred cash losses in the financial period and in the immediately preceding financial year.

12. The company has not defaulted in repayment of dues to financial institutions or banks.

13. The company had not granted any loans against pledge or security of shares.

14. The company is not a chit fund/nidhi/mutual benefit fund/society.

15. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

16. According to the information and explanations given to us, the Company has not given any guarantees or provided any security in respect of borrowings taken by others from banks and financial institutions.

17. Term loans obtained by the Company were applied for the purpose for which the loans were obtained.

18. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash-flow statement and other records, we report that no funds raised on short term basis have prima facie, been used during the period for long term investment and vice versa.

19. The company has not made any preferential allotment to any parties, firms and/or companies covered in the register maintained under section 301 of the Companies Act, 1956. Hence, there does not arise any question of an enquiry of the price of the issue to ascertain whether the same is, prima facie, prejudicial to the interest of the Company.

20. The Company has not issued any debentures hence; question of creating securities does not arise.

21. The company has not raised any money by public issues during the period.

22. 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 was noticed or reported during the period.

For MUKESH M. SHAH & CO. CHARTERED ACCOUNTANTS Firm Registration No. 106625W

PARTNER Chandresh S. Shah Membership No. 42132

Place Ahmedabad. Date 30th May, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of Steelco Gujarat Limited (the company) as at 31st March, 2010, and also In- 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 companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. 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 applied 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 section 227(4A) of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraph 4 of the said Order.

Further to our comments in the Annexure referred to above, 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 it appears from our examination of the books;

(c) 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;

(d) In our opinion, the Balance Sheet and 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.

(e) On the basis of the written representations received from directors of the company and taken on record by the Board of Directors, we report that no director is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and

(f) In our opinion, and to best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and 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, 2010;

(ii) in the case of the Profit and 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.

Annexure to the Auditors Report

With reference to the Annexure referred to in the Auditors to the Members of Steelco Gujarat Limited on the accounts for the year ended 31st March, 2010, we report that:

1. (a) The fixed assets register maintained by the company is required to be updated.

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the period were not substantial and therefore do not affect the going concern assumption.

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

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

(c) The company has maintained proper records of inventory. According to the information and explanations given to us, no material discrepancies were noticed on physical verification of inventory.

3. a) The unsecured loans taken by the company from a director are as under:

(Rs. in lacs)

Name of Party Relationship Amount taken Amount repaid Year during the year during the year ended Balance

Mr. Mahendra Lodha Director 1425.00 600.00 825.00

b) The rate of interest and other terms and conditions of these loans are not prima facie prejudicial to the interest of the company.

c) No amount is overdue.

4. The company has not granted any loan, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b), (iii-c) and (iii-d) of paragraph 4 of the order are not applicable.

5. 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 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 weaknesses in internal control.

6. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered, in our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 and exceeding the value of five lakh rupees 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.

7. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the Public within the meaning of the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder. Further, we are informed that no order has been passed by the company Law Board.

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

9. We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of the cost records and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

10. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance dues, Income-tax, Sales-tax, Wealth tax, Service Tax, Custom duty, Excise duty, cess and any other dues during the period with the appropriate authorities. There are no cases of non-deposit of any undisputed statutory dues outstanding for a period of more than six months as at 31st March, 2010 from the date they became payable.

(b) According to the information and explanations given to us, there are no cases of non-deposit with appropriate authorities of disputed dues of sales tax, income-tax, customs duty, wealth tax, excise duty and cess except the following:

Financial period to Act Nature of dues which it relates

1991-92 Income Tax Act, 1961 Income Tax

1992-93 Income Tax Act, 1961 Income Tax

1993-94 Income Tax Act, 1961 Income Tax

2003-04 Income Tax Act, 1961 Income Tax

Financial period to Forum where dispute Amount which it relates is pending (Rs. in Lacs)

1991-92 Honble Gujarat High Court 24

1992-93 Honble Gujarat High Court 25

1993-94 Honble Gujarat High Court 65

2003-04 Income Tax Appellate Tribunal 84

11. The accumulated losses at the end of the financial period are more than 50% of its net worth. Moreover, the company has not incurred cash losses in the financial period and in the immediately preceding financial year.

12. The company has not defaulted in repayment of dues to financial institutions or banks.

13. The company had not granted any loans against pledge or security of shares.

14. The company is not a chit fund/nidhi/mutual benefit fund/society.

15. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

16. According to the information and explanations given to us, the company has not given any guarantees or provided any security in respect of borrowings taken by others from banks and financial institutions.

17. Term loans obtained by the company were applied for the purpose for which the loans were obtained.

18. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash-flow statement and other records, we report that no funds raised on short term basis have prima facie, been used during the period for long term investment and vice versa.

19. The company has made preferential allotment of 12.5% Cumulative, Optionally Convertible Preference shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. in our opinion, and according to the information and explanations given to us, the price of the issue, is not, prima facie, prejudicial to the interest of the Company.

20. The company has not issued any debentures hence question of creating securities does not arise.

21. The company has not raised any money by public issues during the period.

22. 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 was noticed or reported during the period.

For MUKESH M. SHAH & CO. CHARTERED ACCOUNTANTS

PARTNER Chandresh S. Shah Membership No. 42132

Place : Ahmedabad.

Date : 9th August, 2010

Firm Registration No. 106625W