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Auditor Report of Uttam Value Steels Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Uttam Value Steels Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial 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 financial statements based on our audit. 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, on a test basis, 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 financial control system 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 whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

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

(b) in the case of the 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.

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 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 [and proper returns adequate for the purposes of our audit have been received from branches not visited by us];

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

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

e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013; 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 Number 22

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note Number 25;

iii. The Company has not declared any dividends and hence clause iii of the said rule is not applicable

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

[Referred to in above of the Independent Auditor's Report of even date to the Members of Uttam Value Steels Limited on the standalone Financial Statements for the year ended 31st March 2015]

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

(b) As per the information and explanation given to us, the fixed assets are physically verified by the management according to a phased program designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the program, the management during the year physically verified the fixed assets at certain locations and no material discrepancies were noticed on such verification.

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

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

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

3. According to information and explanation given to us, the Company has not granted nor has taken any loans, secured or unsecured loans to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

In view of the above, provisions of paragraph 3, clause (iii) sub-clause (a) and (b) of the Order are not applicable to the company.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Section 73 and 74 of the Act and the rules framed there under. Hence the provisions of paragraph 3 clause 5 of the Order are not applicable to the company.

6. We have broadly reviewed the books of accounts maintained by the company, where, pursuant to the rules made by the Central Government of India, the maintenance of Cost Records have been prescribed undersub-section 1 of section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been 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 the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues, including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of excise duty and income tax as at 31stMarch 2015 which have not been deposited on account of a dispute, are as follows:

Name of Nature of dues Amount Forum where the Statute (Rs. in lacs) dispute is pending

The Central Excise Act, 1944 Central Excise 38.94 Additional Commissioner

Central Excise 32.95 Assistant Commissioner

Central Excise 171.93 Commissioner

Central Excise 6.57 High Court

Central Excise 34.02 Supreme Court

Income Tax Act, 1961 Income Tax 21,546.00 CIT(A)

8. The Company's accumulated losses at the end of the current year are more than fifty percent of its net worth. The Company has not incurred cash losses during the year and also not incurred cash losses in the immediately preceding period.

9. In our opinion and according to the information and explanation given to us and the books of accounts verified by us, the company has not defaulted in repayment of dues to a financial institution or bank as at the balance sheet date.

10. In our opinion and according to the information and the explanations given to us, the Company has given guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are not prejudicial to the interest on the Company.

11. In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.

12.During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Todarwal & Todarwal Chartered Accountants ICAI RegNo : 111009W

Sunil Todarwal Partner M. No. : 32512

Dated :29th May, 2015 Place : Mumbai




Mar 31, 2014

We have audited the accompanying financial statements of Uttam Value Steels Limited ("the Company") (previously known as Lloyds Steel Industries Limited), which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial 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 notified under Sub-Section 3(c) of Section 211 of 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. 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, on a test basis, about the amounts and

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

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

Opinion

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

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

(b) in the case of the Statement of Profit and Loss, of the 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 [and proper returns adequate for the purposes of our audit have been received from branches not visited by us];

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under Sub-Section 3(c) of Section 211 of the Companies Act, 1956 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;

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.

[Referred to in above the Auditor''s Report of even date to the Members of Uttam Value Steels Limited on the Financial Statements for the year ended 31st March 2014]

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

(b) As per the information and explanation given to us, fixed assets are physically verified by the management according to a phased programme designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, the management during the year physically verified the fixed assets at certain locations and no material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us, the company has not disposed off any significant part of the fixed assets during the year. Thus, paragraph 4(i) (c) of the Order is not applicable.

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

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

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

3. According to information and explanation given to us, the Company has not granted nor has taken any loans, secured or unsecured loans to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

In view of the above, provisions of clause 4 (iii) (a) to (e) of the Order are not applicable to the company.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

5. (a) On the basis of our examination of the books of account, we are of the opinion that the transactions that need to be entered in the register in pursuance of Section 301 of the Act have been entered in the said register.

(b) In our opinion, and according to the information & explanation given to us, the transactions made during the year with parties covered under Section 301 of the Act have been at prices which are reasonable, having regard to the prevailing market price for such goods and materials or prices at which transaction for similar goods or material have been made with other parties.

6. According to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under. Hence the provisions of clause 4(vi) are not applicable to the company.

7. In our opinion and according to information and explanation given to us, the Company''s present internal audit system is commensurate with its size and the nature of its business.

8. We have reviewed the books of accounts maintained by the company in respect of Steel division, where, pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed under section 209(1) (d) of the Companies Act, 1956. We are of the view that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also Management representations, undisputed statutory dues in respect of Provident fund, Profession Tax, Income Tax, Sales Tax, Value added Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess and other material statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities.

10. The Company''s accumulated losses at the end of the current year are more than fifty percent of its net worth. The Company has not incurred cash losses during the year and also not incurred cash losses in the immediately preceding year.

11. In our opinion and according to the information and explanation given to us and the books of accounts verified by us, the company has not defaulted in repayment of dues to a financial institution or bank.

12. According to information and explanation 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 during the year.

13. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to it. Hence the provisions of clause 4(xiii) of the Order is not applicable to the company.

14. According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments. Hence clause 4(xiv) of the Order is not applicable to the company.

15. According to the information and explanations given to us, the Company has given guarantee for loans taken by others from a bank, the terms and conditions whereof in our opinion are not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.

17. On the basis of overall examination of the Balance Sheet of the Company and according to information and explanations given to us, there are no funds raised on short-term basis, which have been used for long-term investments.

18. According to information and explanation given to us, the Company has not during the year, made preferential allotment of shares to the party covered in the register maintained under section 301. Hence the provision of clause 4(xviii) of the Order is not applicable to the company.

19. According to information and explanation given to us, the company has not issued any fresh debenture during the year. Hence the provisions of clause 4(xix) of the Order is not applicable to the company.

20. According to information and explanation given to us, the Company has not raised any money by public issue during the year. Hence the provisions of clause 4(xx) of the Order is not applicable to the company.

21. During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of such case by the Management.

For and on behalf of

Todarwal & Todarwal

Chartered Accountants

ICAI Reg No : 111009W

Sunil Todarwal

Dated : 30th May, 2014 Partner

Place: Mumbai M. No. : 32512


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Uttam Value Steels Limited ("the Company") (previously known as Lloyds Steel Industries Limited), which comprise the Balance Sheet as at March 3I,20I3, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 2II of the Companies Act, I956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 3I, 20I3;

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

c) The Balance Sheet, Statement of Profit and Loss, and 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 referred to in sub-section (3C) of Section 2II of the Companies Act, I956;

e) On the basis of written representations received from the directors as on March 3I, 20I3, and taken on record by the Board of Directors, none of the directors is disqualified as on March 3I, 20I3, from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Companies Act, I956.

ANNEXURE TO AUDITORS'' REPORT

[Referred to the Auditor''s Report of even date to the Members of Uttam Value Steels Limited on the Financial Statements for the year ended 31st March 2013]

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

(b) As per the information and explanation given to us, fixed assets are physically verified by the management according to a phased programme designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, the management during the year physically verified the fixed assets at certain locations and no material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us, the company has not disposed off any significant part of the fixed assets during the year. Thus, paragraph 4(i)(c) of the Companies (Auditor''s Report) Order, 2003 is not applicable.

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

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

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

3. (a) According to information and explanation given to us, the Company has not granted any loans, secured or unsecured loans to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

In view of the above, provisions of clause 4 (iii) (b), (c), (d) are not applicable to the company.

(b) The company has taken unsecured loan of Rs 5,000 lacs from a company covered in the register maintained under Section 301 of the Act. According to the information and explanation given to us, the rate of interest and other terms and conditions of the loan taken are prima facie not prejudicial to the interest of the company.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

5. (a) On the basis of our examination of the books of accounts, we are of the opinion that the transactions that need to be entered in the register in pursuance of Section 301 of the Act have been entered in the said register.

(b) In our opinion, and according to the information & explanation given to us, the transactions made during the year with parties covered under Section 301 of the Act have been at prices which are reasonable, having regard to the prevailing market price for such goods and materials or prices at which transaction for similar goods or material have been made with other parties.

6. According to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under. Hence the provisions of clause 4(vi) are not applicable to the company.

7. In our opinion and according to information and explanation given to us, the Company''s present internal audit system is commensurate with its size and the nature of its business.

8. We have reviewed the books of accounts maintained by the company in respect of Steel division, where, pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed under Section 209(1) (d) of the Companies Act, 1956. We are of the view that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also Management representations, undisputed statutory dues in respect of Provident fund, Profession Tax, Income Tax, Sales Tax, Value added Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess and other material statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities.

(b) According to the records of the Company, the disputed dues in respect of Excise Duty of Rs 428.73 lacs (Previous period Rs 447.84 lacs) and Sales Tax of Rs NIL (Previous period Rs 28.65 lacs) as at March 31st, 2013 have not been deposited with appropriate authorities and no provision has been made for the same.

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

38.94 Chief Commissioner of Appeals

32.95 Assistant Commissioner

135.55 Commissioner

The Central Excise Act, 1944 36.38 Additional Commissioner

150.89 High Court

34.02 Supreme Court

Total 428.73

10 The Company s accumulated losses at the end of the current year are more than fifty percent of its net worth. The Company has not incurred cash losses during the year and also not incurred cash losses in the immediately preceding period (9 months).

11 In our opinion and according to the information and explanation given to us and the books of accounts verified by us, the company has not defaulted in repayment of dues to financial institutions and banks.

12 According to information and explanation 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 during the year.

13 In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to it. Hence the provisions of clause 4(xiii) are not applicable to the company.

14 According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments. Hence clause 4(xiv) is not applicable to the company.

15 According to the information and explanations given to us, the Company has given guarantee for loans taken by others from a bank, the terms and conditions whereof in our opinion are not prejudicial to the interest of the company.

16 As per information given to us, no fresh term loans have been taken by the Company during the year. Hence the provisions of clause 4(xvi) are not applicable to the company.

17 On the basis of overall examination of the Balance Sheet of the Company and according to information and explanations given to us, there are no funds raised on short-term basis, which have been used for long-term investments.

18 According to information and explanation given to us, the Company has during the year, made preferential allotment of shares to the party covered in the register maintained under Section 301. In our opinion, the price at which the shares have been issued is not prejudicial to the interest of the Company.

19 According to information and explanation given to us, the Company has not issued any fresh debenture during the year. Hence the provisions of clause 4(xix) are not applicable to the Company.

20 According to information and explanation given to us, the Company has not raised any money by public issue during the year. Hence the provisions of clause 4(xx) are not applicable to the company.

21 During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of such case by the Management.

For and on behalf of

Todarwal & Todarwal

Chartered Accountants

ICAI Reg No : 111009W

Sunil Todarwal

Dated : 25th May, 2013 Partner

Place: Mumbai M. No. : 32512


Mar 31, 2012

We have audited the accompanying financial statements of Lloyds Steel Industries Limited, which comprise the Balance sheet as at March 31, 2012 and the Statement of Profit and Loss and Cash Flow statement for the period ended then, and a summary of Significant Accounting Policies and other explanatory information.

Management's Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and Cash flows of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub section (3C) of section 211 of the Companies Act. 1956.

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 auditing standards 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 of material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order, 2003. as amended by Companies (Auditors' Report) (Amendment) 2004 (together 'the order') issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, of India (the Act) and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

Opinion

(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 appears from our examination of those books;

(c) The Balance Sheet, 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, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act:

(e) On the basis of the written representations received from the Directors and taken on record by the Board of Directors of the Company, none of the Directors is disqualified as on March 31,2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In view of the foregoing paragraphs, in our opinion and to the best of our information and according to the explanations given to us. the Balance Sheet. Profit and Loss Account and Cash flow together with the Notes thereon and attached thereto, give in the prescribed manner, the information required by the Act and also 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 March 31, 2012:

ii) In the case of the Profit and Loss Account, of the Loss for the period ended on that date; and

iii) In the case of the Cash Flow Statement, of the Cash Flow of the Company for the period ended on that date.

ANNEXURE TO AUDITORS' REPORT

[Referred to in above the Auditor's Report of even date to the Members of Lloyds Steel Industries Limited on the Financial Statements for the period ended 31st March 2012]

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

(b) As per the information and explanation given to us, fixed assets are physically verified by the management according to a phased programmed designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programmed, the management during the period physically verified the fixed assets at certain locations and no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanation given to us, the company has disposed off an insignificant part of the fixed assets during the period. Thus, paragraph 4(i) (c) of the Companies (Auditor's Report) Order, 2003 is not applicable.

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

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

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

3. (a) According to information and explanation given to us, the Company has neither granted nor taken any secured or unsecured loans to from companies, firms, parties covered in the register maintained under Section 301 of the Act.

In view of the above, provisions of clause 4(iii) (b). (c),
4. In our opinion and according to information and explanation given us, there are adequate internal control procedures commensurate with the sis-e of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. ,

5. (a) On the basis of our examination of the books of account, we are of the opinion that the transactions that need to be entered in the register in pursuance of Section 301 of the Act have been entered in the said register.

(b) In our opinion, and according to the information & explanation given to us, the transactions made during the period with parties covered under Sec.301 of the Act have been at prices which are reasonable, having regard to the prevailing market price for such goods and materials or prices at which transaction for similar goods or material have been made with other parties.

6. According to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under. Hence the provisions of clause 4(vi) are not applicable to the company.

7. In our opinion and according to information and explanation given to us, the Company's present internal audit system is commensurate with its size and the nature of its business.

8. We have reviewed the books of accounts maintained by the company in respect of Steel division, where, pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed u/s. 209(1) (d) of the Companies Act, 1956. We are of the view that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also Management representations, undisputed statutory dues in respect of Provident fund, Profession tax, Income Tax, Sales Tax, Value added tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities.

(b) According to the records of the Company, the disputed dues in respect of Excise Duty of Rs 447.84 lacs (Previous year Rs 447.84 lacs) and Sales Tax of Rs 28.65 lacs (Previous year Rs 28.65 lacs) as at March 31st, 2012 have not been deposited with appropriate authorities and no provision has been made for the same.

Sr. Name of the Amount Forum where No. Statute (In Lacs) dispute is pending

1 The Central Excise 43.38 Chief Commissioner Act, 1944 of Appeals

10 The Company's accumulated losses at the end of the current period are more than fifty percent of its net worth. The Company has not incurred cash losses during the period and also not incurred cash losses in the immediately preceding financial period.

11 According to the information and records produced before us. the amount of default in the dues to lenders aggregated to 7334.87 lacs as loans were under various stages of restructuring process. The restructuring of entire Loans has been completed during the period.

12 According to information and explanation 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 during the period.

13 In our opinion, considering the nature of activities carried on by the Company during the period, the provisions of any special statute applicable to chit fund/ Nidhi mutual benefit fund/ societies are not applicable to it. Hence the provisions of clause 4(xiii) are not applicable to the company.

14 According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments. Hence clause 4(xiv) is not applicable to the company.

15 According to the information and explanations given to us, the Company has given guarantee for roans taken by others from a bank, the terms and conditions whereof in our opinion are not prejudicial to the interest of the company.

16 As per information given to us, no fresh term loans have been taken by the Company during the period. Hence the provisions of clause 4(xvi) are not applicable to the company .

17 On the basis of overall examination of the Balance Sheet of the Company and according to information and explanations given to us, there are no funds raised on short-term basis, which have been used for long-term investments.

18 According to information and explanation given to us, the Company has during the period, made preferential allotment of shares to the party covered in the register maintained under section 301. In our opinion, the price at which the shares have been issued is not prejudicial to the interest of the company.

19 According to information and explanation given to us, the company has not issued any fresh debenture during the period. Hence the provisions of clause 4(xix) are not applicable to the company.

20 According to information and explanation given to us, the Company has not raised any money by public issue during the period. Hence the provisions of clause 4(xx) are not applicable to the company.

21 During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the period, nor have we been informed of such case -by the Management.

For and on behalf of

TODARWAL & TODARWAL

Chartered Accountants

ICAI Reg No : 111009W

Sunil Todarwal

Dated : 21st April 2012 Partner

Place : Mumbai M. No. 32512


Jun 30, 2011

1. We have audited the attached Balance Sheet of Lloyds Steel Industries Limited as at June 30, 2011 and the related Profit and Loss Account and Cash Flow for the period ended on that date, annexed thereto, both of which we have signed under reference to this report. These financial statements are the responsibility of the Management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with the 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.

3. Further, 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 appears from our examination of those books;

(c) The Balance Sheet, 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, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act;

(e) The company has changed the valuation method, of Engineering Plant finished goods, from contract price method to lower of cost and market value method. Since there was no closing inventories of the same as on 30th June, 2011, there is no impact on the financials in the current period.

(f) The company has not provided interest amounting to f 6096.44 lacs for the current period (till date f 22771.77 lacs): Had the same been considered the loss for the period would have been Rs20063.58 lacs (as against the reported figure of loss of f 13967.14 lacs) and the accumulated loss for the period ending would have been f 185440.57 lacs (as against the reported loss of f 162668.80 lacs)

(g) On the basis of the written representations received from the Directors and taken on record by the Board of Directors of the Company, none of the Director is disqualified as on June 30, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(h) In view of the foregoing paragraphs, in our opinion and to the best of our information and according to the explanations given to us, and subject to point 4 (f), regarding non provision of interest above the Balance Sheet, Profit and Loss Account and Cash flow together with the Notes thereon and attached thereto, give in the prescribed manner, the information required by the Act and also 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 June 30, 2011;

ii) In the case of the Profit and Loss Account, of the Loss for the period ended on that date; and

iii) In the case of the Cash Flow Statement, of the Cash Flow of the Company for the period ended on that date.

ANNEXURE TO AUDITORS' REPORT

[Referred to in Paragraph 3 of the Auditor's Report of even date to the Members of Lloyds Steel Industries Limited on the Financial Statements for the period ended 30th June 2011]

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

(b) As per the information and explanation given to us, fixed assets are physically verified by the management according to a phased programme designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, the management during the period physically verified the fixed assets at certain locations and no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanation given to us, the company has disposed off an insignificant part of the fixed assets during the period. Thus, paragraph 4(i) (c) of the Companies (Auditor's Report) Order, 2003 is not applicable.

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

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

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

3. (a) According to information and explanation given to us, the Company has neither granted nor taken any secured or unsecured loans to / from companies, firms, parties covered in the register maintained under Section 301 of the Act. In view of the above, provisions of clause 4(iii) (b), (c), (d), (e), (f) and (g) are not applicable to the company.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

5. (a) On the basis of our examination of the books of account, we are of the opinion that the transactions that need to be entered in the register in pursuance of Section 301 of the Act have been entered in the said register. (b) In our opinion, and according to the information & explanation given to us, the transactions made during the period with parties covered under Sec.301 of the Act have been at prices which are reasonable, having regard to the prevailing market price for such goods and materials or prices at which transaction for similar goods or material have been made with other parties.

6. According to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under. Hence the provisions of clause 4(vi) are not applicable to the company.

7. In our opinion and according to information and explanation given to us, the Company's present internal audit system is commensurate with its size and the nature of its business.

8. We have reviewed the books of accounts maintained by the company in respect of Steel division, where, pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed u/s. 209(1) (d) of the Companies Act, 1956. We are of the view that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also Management representations, undisputed statutory dues in respect of Provident fund, Profession tax, Income Tax, Sales Tax, Value added tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities. (b) According to the records of the Company, the disputed dues in respect of Excise Duty of Rs 447.84 lacs (Previous year Rs 447.84 lacs) and Sales Tax of Rs 28.65 lacs (Previous year Rs 28.65 lacs) as at June 30, 2011 have not been deposited with appropriate authorities and no provision has been made for the same.

Sr. Name of the Amount Forum where dispute No. Statute (In Lacs) is pending

1 The Central Excise Act, 1944 43.38 Chief Commissioner of Appeals

45.07 Assistant Commissioner

135.55 Commissioner

38.94 Additional Commissioner

150.89 High Court

34.01 Supreme Court

Total 447.84

2 State & Central Sales Tax Acts. 28.65 Gujarat Sales Tax Tribunal

Total 28.65

10 The Company's accumulated losses at the end of the current period are not less than fifty percent of its net worth and the Company has not incurred cash losses in the period under audit, and also not in the immediately preceding financial year.

11 According to the records of the Company, and as informed to us, the dues to Lenders are under various stages of restructuring process. Amount of default aggregating to Rs 7334.87 lacs till date including Rs 4559.96 lacs during the period.

12 According to information and explanation 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 during the period.

13 In our opinion, considering the nature of activities carried on by the Company during the period, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to it. Hence the provisions of clause 4(xiii) are not applicable to the company.

14 According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments. Hence clause 4(xiv) is not applicable to the company.

15 According to the information and explanations given to us, the Company has given guarantee for loans taken by others from a bank, the terms and conditions whereof in our opinion are not prejudicial to the interest of the company.

16 As per information given to us, no fresh term loans have been taken by the Company during the period. Hence the provisions of clause 4(xvi) are not applicable to the company.

17 On the basis of overall examination of the Balance Sheet of the Company and according to information and explanations given to us, there are no funds raised on short-term basis, which have been used for long-term investments.

18 According to information and explanation given to us, the Company has during the period made preferential allotment of share to a party covered in the register maintained under section 301. In our opinion the price at which it is issued is not prejudicial to the interest of the Company.

19 According to information and explanation given to us, the company has not issued any fresh debenture during the period. Hence the provisions of clause 4(xix) are not applicable to the company.

20 According to information and explanation given to us, the Company has not raised any money by public issue during the period. Hence the provisions of clause 4(xx) are not applicable to the company.

21 During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the period, nor have we been informed of such case by the Management.

For and on behalf of

TODARWAL & TODARWAL

Chartered Accountants

ICAI Reg. No.: 111009W

Sunil Todarwal

Dated : 29th August, 2011 Partner

Place : Mumbai M. No. - 32512


Mar 31, 2010

1. We have audited the attached Balance Sheet of Lloyds Steel Industries Limited as at March 31, 2010 and the related Profit and Loss Account and Cash Flow for the year ended on that date, annexed thereto, both of which we have signed under reference to this report. These financial statements are the responsibility of the Management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with the 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.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by Companies (Auditors Report) (Amendment) Order, 2004 (together the order) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, of India (the Act) and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

4. Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit;

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

(c) The Balance Sheet, 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, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act;

(e) The company has not provided interest amounting to Rs. 4366.22 lacs for the current year (till date Rs. 19122.44 lacs). Had the same been considered the loss for the year would have been Rs. 12174.31 lacs (as against the reported figure of loss of Rs. 7808.09 lacs) and the accumulated loss for the year ending would have been Rs.169726.10 lacs (as against the reported loss of Rs. 150603.66 lacs)

(f) On the basis of the written representations received from the Directors and taken on record by the Board of Directors of the Company, none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(g) In view of the foregoing paragraphs, in our opinion and to the best of our information and according to the explanations given to us, and subject to point 4 (e), regarding non provision

of interest above the Balance Sheet, Profit and Loss Account and Cash flow together with the Notes thereon and attached thereto, give in the prescribed manner, the information required by the Act and also 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 March 31, 2010;

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

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



ANNEXURE TO AUDITORS REPORT

[Referred to in Paragraph 3 of the Auditors Report of even date to the Members of Lloyds Steel Industries Limited on the Financial Statements for the year ended 31st March 2010]

1. (a) The Company is maintaining proper records showing full

particulars including quantitative details and situation of fixed assets.

(b) As per the information and explanation given to us, fixed assets are physically verified by the management according to a phased programme designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, the management during the year physically verified the fixed assets at certain locations and no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanation given to us, the company has disposed off an insignificant part of the fixed assets during the year. Thus, paragraph 4(i) (c) of the Companies (Auditors Report) Order, 2003 is not applicable.

2. (a) Inventory has been physically verified by the management

during the year. In our opinion, the frequency of verification is reasonable.

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

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

3. (a) Accordfng to information and explanation given to us, the

Company has neither granted nor taken any secured or unsecured loans to / from companies, firms, parties covered in the register maintained under Section 301 of the Act. In view of the above, provisions of clause 4(iii) (b), (c), (d), (f) and (g) are not applicable to the company.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

5. (a) On the basis of our examination of the books of account, we are of the opinion that the transactions that need to be entered in the register in pursuance of Section 301 of the Act have been entered in the said register.

(b) In our opinion, and according to the information & explanation given to us, the transactions made during the year with parties covered under Sec.301 of the Act have been at prices which are reasonable, having regard to the prevailing market price for such goods and materials or prices at which transaction for similar goods or material have been made with other parties.

6. According to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under. Hence the provisions of clause 4(vi) are not applicable to the company.

7. In our opinion and according to information and explanatiorfgiven to us, the Companys present internal audit system is commensurate with its size and the nature of its business.

8. We have Broadly reviewed the books of accounts maintained by the company in respect of Steel division , where, pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed u/s. 209(1) (d) of the Companies Act, 1956. We are of the view that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also Management representations, undisputed statutory dues in respect of Provident fund, Profession tax. Income Tax, Sales Tax, Value added tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities. (b) According to the records of the Company, the disputed dues in respect of Excise Duty of Rs.447.84 lacs (Previous year Rs.408.90 Lacs) and Sales Tax of Rs. 28.65 lacs (Previous year Rs.28.65 lacs) as at March 31, 2010 have not been deposited with appropriate authorities and no provision has been made for the same.

Sr. Name of the Amount Forum where dispute No. Statute (In Lacs) is pending 1 The Central Excise 43.38 Chief Commissioner of Act, 1944 Appeals 45.07 Assistant Commissioner 113.07 Commissioner 22.48 Deputy Commissioner 38.94 Additional Commissioner 150.89 High Court 34.01 Supreme Court Total 447.84 2 State & Central 28.65 Gujarat Sales Tax Tribunal Sales Tax Acts. Total 28.65

10 The Companys accumulated losses at the end of the financial year are not less than fifty percent of its net worth and it has not incurred cash losses in the financial year under audit, however, in the immediately preceding financial year the Company had incurred cash losses.

11 According to the records of the Company, and as informed to us, the dues to Lenders are under various stages of restructuring process. Amount of default aggregating to Rs.7843.32 lacs till date including 4620.51 lacs during the year.

12 According to information and explanation 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 during the year.

13 In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to it. Hence the provisions of clause 4(xiii) are not applicable to the company.

14 According to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments. Hence clause 4(xiv) is not applicable to the company.

15 According to the information and explanations given to us, the Company has given guarantee for loans taken by others from a bank, the terms and conditions whereof in our opinion are not prejudicial to the interest of the company.

16 As per information given to us, no fresh term loans have been taken by the Company during the year. Hence the provisions of clause 4(xvi) are not applicable to the company.

17 On the basis of overall examination of the Balance Sheet of the Company and according to information and explanations given to us, there are no funds raised on short-term basis, which have been used for long-term investments.

18 According to information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 during the year.

19 According to information and explanation given to us, the company has not issued any fresh debenture during the year. Hence the provisions of clause 4(xix) are not applicable to the company.

20 According to information and explanation given to us, the Company has not raised any money by public issue during the year. Hence the provisions of clause 4(xx) are not applicable to the company.

21 During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of such case by the Management.



For and on behalf of TODARWAL & TODARWAL Chartered Accountants Sunil Todarwal Dated : 24th May, 2010 Partner Place: Mumbai M. No. : 32512

 
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