Auditor Report of Vidarbha Iron & Steel Corporation Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Vidarbha Iron & Steel Corporation Ltd. ("the Company"), which comprise the Balance Sheet as at 31st March, 2015 the Statement of Profit and Loss, 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 Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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 of 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

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, of the state of affairs of the Company as at 31st March, 2015 and its Profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to be 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 financial statements- refer to Note No. 23 to the financial statements;

ii) the Company did not have any long term contracts including the derivative contracts for which there were any material foreseeable losses;

iii) there was no amount required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in our report to the members of Vidarbha Iron & Steel Corporation Limited ('the Company'), for the year ended 31st March, 2015.

We report that :

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

ii) a) Since there is no inventory clause ii a), ii b) and ii c) is not applicable.

iii) The Company has not granted any loans secured or unsecured to Companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 ('the Act').

iv) In our opinion and according to the information and explanations given to us, 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 and during the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) The Company has not accepted any deposits from the public.

vi) Maintenance of cost records has not been prescribed by the Central Government under Companies (Cost Records & Audit) Rules, 2014 read with Companies (Cost Records & Audit) amendment rules, 2014, prescribed by the Central Government U/s 148 of the Companies Act, 2013.

vii) (a) According to the information and explanations given to us, the Company is regular in depositing the 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, cess and any other statutory dues with the appropriate authorities.

(b) The Company has disputed statutory dues of Rs.637.60 lacs in respect of Service Tax demand for the period from May-2003 to September-2011, which has not been deposited on account of appeal is pending before CESTAT.

(c) According to the information and explanations given to us no amount was required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under.

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

ix) The Company has not defaulted in repayment of dues to financial institution or bank or debenture-holders.

x) The Company has not given any guarantee for loans taken by others from bank or financial institution, the terms and conditions whereof are prejudicial to the interest of the Company.

xi) The Company has not raised any term loan during the year.

xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For SALVE & Co. Chartered Accountants (Firm's Registration No.109003W)

C.A. K. P SAHASRABUDHE Place : Nagpur Partner Date : 29th May, 2015 (Membership No. 7021)

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

c. the Balance Sheet, Statement of Profit and Loss and 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 211 of the Companies Act, 1956; and

e. on the basis of written representations received from the directors as on 31st March, 2014, and 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 clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURES TO AUDITORS'' REPORT:

The Annexure referred to in our report to the members of Vidarbha Iron & Steel Corporation Limited (''the Company'') for the year ended 31st March, 2014.

We report that:

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) Since there is no inventory this clause is not applicable.

iii) (a) The Company has not granted any loans, secured or unsecured, to the Companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, and therefore Clauses (iii) (b), (iii) (c) and (iii) (d) of the said Order are not applicable.

(e) The Company has not taken any loan secured and unsecured from any party covered in the register maintained under section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there 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 and during the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) There were no contracts or arrangements referred to in section 301 of the Act that needed to be entered in the Register required to be maintained under that section and therefore Clause 4 (v) (b) of the said order is not applicable.

vi) The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies (Acceptance of Deposit) Rules 1975.

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

viii) Maintain of cost records has not been prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956

ix) (a) 1) According to the records examined by us, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities. No amounts are outstanding for transfer to the Investors Education and Protection Fund under Section 205C of the Companies Act, 1956.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2014 for a period of more than 6 months from the date they became payable.

(b) On the basis of our examination of the documents and records, there are no dues of Sales Tax, Income Tax, Wealth Tax, Service Tax, Excise Duty, Customs Duty and Cess which have not been deposited on account of any dispute, except in the case of service tax, where appeal is pending before CESTAT against demand of Rs.637.60 lacs for the period from May-2003 to September-2011.

x) The company''s accumulated losses at the end of the financial year are more than 50% of its net worth and it has not incurred any cash losses during the financial year and in the immediately proceeding financial year.

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

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a), (xiii) (b), (xiii) (c) and (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi) The Company has not raised any term loan during the year.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

xix) During the year covered by our audit report, the Company has not issued any secured debentures.

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

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For SALVE & CO. Chartered Accountants Registration No. 109003W

(C.A K.P. SAHASRABUDHE) Place : Nagpur (Partner) Date : 30th May, 2014 (Membership No.7021)

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Vidarbha Iron & Steel Corporation Limited (‘the Company''), which comprise the Balance Sheet as at 31st March, 2013, and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 2 11 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

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

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

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"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c. the Balance Sheet, Statement of Profit and Loss and 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 2 11 of the Companies Act, 1956; and

e. on the basis of written representations received from the directors as on 31st March, 2013, and 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 clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

ANNEXURES TO AUDITORS'' REPORT:

The Annexure referred to in our report to the members of Vidarbha Iron & Steel Corporation Limited (‘the Company'') for the year ended 31st March, 2013.

We report that:

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) a) Since there is no inventory this clause is not applicable.

iii) (a) The Company has not granted any loans, secured or unsecured, to the Companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, and therefore Clauses (iii) (b), (iii) (c) and (iii) (d) of the said Order are not applicable.

(d) The Company has not taken any loan secured and unsecured from any party covered in the register maintained under section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there 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 and during the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) There were no contracts or arrangements referred to in section 301 of the Act that needed to be entered in the Register required to be maintained under that section and therefore Clause 4 (v) (b) of the said order is not applicable.

vi) The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies (Acceptance of Deposit) Rules 1975.

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

viii) Maintain of cost records has not been prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956

ix) (a) 1) According to the records examined by us, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities. No amounts are outstanding for transfer to the Investors Education and Protection Fund under Section 205C of the Companies Act, 1956.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2013 for a period of more than 6 months from the date they became payable.

(b) On the basis of our examination of the documents and records, there are no dues of Sales Tax, Income Tax, Wealth Tax, Service Tax, Excise Duty, Customs Duty and Cess which have not been deposited on account of any dispute, except in the case of service tax, where appeal is pending before CESTAT against demand of Rs.. 637.60 lacs for the period from May-2003 to September-2011.

x) The company''s accumulated losses at the end of the financial year are more than 50% of its net worth and it has not incurred any cash losses during the financial year and in the immediately proceeding financial year.

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

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a), (xiii) (b), (xiii) (c) and (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi) The Company has not raised any term loan during the year.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

xix) During the year covered by our audit report, the Company has not issued any secured debentures.

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

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For SALVE & CO.

Chartered Accountants

Registration No. 109003W

(C.A K.P.SAHASRABUDHE)

Place : Nagpur (Partner)

Date : 30th May, 2013 (Membership No.7021)

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Mar 31, 2012

1. We have audited the attached Balance Sheet of " VIDARBHA IRON AND STEEL CORPORATION LTD " as at 31 st March, 2012, the Profit and Loss Statement and the Cash Flow Statement for the year ended on that date both 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.

2. We 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 mis-statements. 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our r opinion.

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

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

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

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

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

(iv) In our opinion, subject to Note No. 1 (g), the Balance Sheet, Profit and Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto particularly Note No. 1(g) give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March,2012;

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

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

5. On the basis of the written representations received from the Directors as on 31 st March, 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year.

ii) a) Since there is no inventory this clause is not applicable.

iii) a) The Company has not granted loan secured or unsecured to any party covered in the register

maintained under section 3 01 of the Companies Act, 1956.

d) The company has not taken any loan secured or unsecured from any party covered in the register maintained under section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with 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 and during the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) There were no contracts or arrangements referred to in Section 301 of the Act that needed to be entered in the Register required to be maintained under that section and therefore Clause 4 (v) (b) of the said Order is not applicable.

vi) The Company has not accepted deposits from the public during the year.

vii) The average annual turnover of Company since does not exceed five crores rupees for the period of three consecutive financial year and preceding this financial year. No internal audit system is required.

viii) Maintenance of cost records has not been prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956.

ix) a) 1) According to the records examined by us, the Company is generally regular in depositing the

undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2012 for a period of more than 6 months from the date they became payable.

b) On the basis of our examination of the documents and records, there are no dues of Sales Tax, Income Tax, Wealth Tax, Excise Duty, Customs Duty and Cess which have not been deposited on account of any dispute, except in the case of service tax, where appeal is pending before CESTAT against demand of Rs.579.21 lacs for the period from May-2003 to March-2011

x) The company's accumulated losses at the end of the financial year are more than 50% of its net worth and it has not incurred any cash losses during the current financial year and in the immediately preceding financial year.

xi) As per the information and explanation given to us by the management the company has not defaulted

in repayment of dues to bank or financial institutions as at the balance sheet date.

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a) to (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not raised any term loan during the year.

xvi) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 3 01 of the Companies Act, 1956 during the year.

xix) During the period covered by our audit report, the Company has not issued any secured debentures.

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

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.



For SALVE & CO.,

Chartered Accountants,

(Registration No.109003W)

CA K.P. Sahasrabudhe

Place: NAGPUR Partner

Date: 29th August, 2012 Membership No.7021

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Mar 31, 2010

We have audited the attached Balance Sheet of "VIDARBHA IRON AND STEEL CORPORATION LTD" as at 31 st March, 2010, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date both 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.

1. We 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 mis-statements. 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, (together the order") issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

iv) In our opinion, subject to Note No. 2 of Schedule "L", the Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of the written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto particularly Note No. 2 of Schedule "L" give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,2010;

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

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

ANNEXURE TO AUDITORS REPORT:

Referred to in paragraph 2 of the Auditors Report of even date to the Members of "ViDARBHA IRON & STEEL CORPORATION LTD." on the financial statements for the year ended 31st March, 2010. 4. i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) All the fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any major part of fixed assets during the year. ii) a) Since there is no inventory this clause is not applicable.

iii) a) The Company has not granted loan secured or unsecured to any party covered in the register maintained under section 301 of the Companies Act, 1956.

d) The company has not taken any loan secured or unsecured from any party covered in the register maintained under section 301 of the Companies Act, 1956.

iv) During the year the Company has not purchased any inventory or fixed assets and such comment regarding internal control systems is not required.

v) There were no contracts or arrangements referred to in Section 301 of the Act that needed to be entered in the Register required to be maintained under that section and therefore Clause 4(v)(b) of the said Order is not applicable.

vi) The Company has not accepted deposits from the public during the year.

vii) The average annual turnover of Company since does not exceed five crores rupees for the period of three consecutive financial year and preceding this financial year. No internal audit system is required. viii) Maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956.

ix) a) 1) According to the records examined by us, the Company is generally regular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, with the appropriate authorities.

2) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2010 for a period of more than 6 months from the date they became payable.

b) On the basis of our examination of the documents and records, there are no dues of Sales Tax, Income Tax, Wealth Tax, Service Tax, Excise Duty, Customs Duty and Cess which have not been deposited on account of any dispute.

x) The companys accumulated losses at the end of the financial year are more than 50% of its net worth and it has not incurred any cash losses during the current financial year and in the immediately preceding financial year.

xi) As per the information and explanation given to us by the management the company has not defaulted in repayment of dues to bank or financial institutions as at the balance sheet date.

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company and, therefore, Clauses 4(xiii)(a) to (xiii) (d) of the said Order are not applicable.

xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) The Company has not raised any term loan during the .year.

xvi) The Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvii) On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

xix) During the period covered by our audit report, the Company has not issued any secured debentures.

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

xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.



For SALVE & CO.,

Chartered Accountants,

(Registration No,109003W)

CA K.P.Sahasrabudhe

Place: NAGPUR Partner

Date: 18th August, 2010 Membership No.7021