Auditor Report of Ashirwad Steels & Industries Ltd.

Mar 31, 2015

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

Management''s Responsibility for the Standalone Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its 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 sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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

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

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

(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

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

(e) on the basis of the written representations received from the directors as on 31 March 2015

taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) In our opinion the Company has adequate internal financial control system in place and the operating effectiveness of such controls; and

(g) with respect to the other matters to be included in the Auditor''s Report in accordance with

Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29(b) to the financial statements;

ii. There were no material foreseeable losses, if any, on long-term contracts including long- term derivative contracts, therefore the requirement for making any provision does not arise.

iii. There has been no event requiring any amount to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors'' Report

The Annexure referred to in our report to the members of Ashirwad Steels & Industries Ltd. for the year ended on 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) The fixed assets have been physically verified by the management as per a phased program of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(ii) As explained to us the management has conducted physical verification of inventory at reasonable intervals during the year wherever possible and/or required.

(iii) The requirement of clause (iii) a and (iii) b of the order are not applicable since no loans have been given to companies, firms or parties covered under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotation, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been observed in the internal controls regarding purchase of inventory and fixed assets and sale of goods.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of sections 73 to 76 or any other relevant provisions of the Companies Act,2013 and the rules framed there under.

(vi) Since the net worth of the Company is less than Rupees one hundred and fifty crores and the turnover in respect of sponge iron is less than Rupees twenty five crore, the requirement of maintenance of cost records is not considered necessary.

(vii) (a) The company is generally regular in depositing undisputed statutory dues including Staff Provident Fund, Employees''

State Insurance, Income Tax, VAT, CST, Service Tax, Excise Duty, Cess, duty of customs and other material statutory dues as applicable to it.

(b) According to the information and explanations given to us the following taxes were not deposited as the same were disputed in appeal at the end of the year:

Particulars Disputed Forum where dispute Amount (Rs.) is pending in appeal As on 31.03.2015

i) VAT Tax on Coal 15,08,910 Appellate Dy. purchase (Net of Commissioner (CT), payment) Hyderabad Rural Division.

ii) Income Tax for: Asst. Yr. 2003-04 2,43,395 Hon''ble Income Tax Appellate Tribunal, Kolkata. Asst. Yr. 2008-09 1,49,196 C.I.T. (Appeals) -C-IM, Kolkata. Asst. Yr. 2010-11 8,00,230 C.I.T. (Appeals) -C-IM, Kolkata.

iii) CENVAT on Capital 12,14,662 Commissioner of Goods(Net of Customs, Central payment) Excise and Service Tax (Appeals III ), Hyderabad.

(c) In our opinion there is no amount required to be transferred to Investor education and protection fund in accordance with the relevant provisions of the Companies Act,1956 and rules framed thereunder.

(viii) The Company does not have any accumulated past losses at the end of the financial year under review and has not incurred cash loss in the current financial year. There was no cash loss incurred in the immediately preceding financial year.

(ix) According to the information and explanations given to us and the records examined by us, the Company has not defaulted in repayment of dues to banks or any financial institutions. The company has not accepted any fund on account of issue of debentures.

(x) According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof could have been prima facie prejudicial to the interest of the Company.

(xi) As informed to us, the company has not taken any term loans during the year.

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

For A. Pradhan & Associates Chartered Accountants Firm''s registration number: 325131E

Place- 28B Kalidas Patitundi Lane Kolkata -700026

Date- 29th May , 2015.

A. Pradhan (Proprietor) Membership number: 053543

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Mar 31, 2014

We have audited the accompanying financial statements of Ashirwad Steels & 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 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. 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 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 March 31, 2014;

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

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

Emphasis of Matter:

We draw attention to Note No.37 to the Financial Statements with respect to Company having filed a legal suit in the Hon''ble High Court of Ranchi against Central Coalfields Ltd. for their illegal adjustment of Company''s purchase advance of Rs. 1,14,30,107/- given to them for purchase of Coal. Meanwhile, the Company has raised Compensation Bill on Central Coalfields Ltd. for Rs. 99,45,450/- for the Accounting Year 2011-12 and also Rs. 99,45,450/- for the Accounting Year 2012-13 along with all amount of interest accrued and due thereon till March, 2014. The entire matter is pending for hearing and adjudication in the Hon''ble High Court, Ranchi. Pending outcome of the aforesaid legal suit against Central Coalfields Ltd.; the Company has not made any adjustments for the above financial transactions/matters in the Financial Statements of Accounts for the Financial Year 2013-14.

Our Opinion is not qualified in respect of the above.

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 subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 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.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

Annexure to the Auditors'' Report:

Referred to in Paragraph 1 of the ''Report on other Legal & Regulatory Requirements'' of our report of even date on the accounts of Ashirwad Steels & Industries Ltd. for the year ended March 31, 2014:

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

(b) The fixed assets have been physically verified by the management as per a phased program of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(c) In our opinion, no fixed assets employed by the company had been disposed off during the year.

2. (a) As explained to us the management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and the book records were not material and have been properly dealt with in the books of accounts.

3. (a) The Company has not given any loan secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, the requirement of clause (iii) (b), (iii) (c) & (iii) (d) of the order are not applicable since no loans have been given to companies, firms or parties covered under section 301 of the Companies Act, 1956.

(c) The company has not taken any loan from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(d) In our opinion, the requirement of clause (iii) f and (iii) g of the order is not applicable as the company has not taken any such loan which is covered under section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotation, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and with regard to the sale of goods, services and disposal of fixed assets. During the course of our audit, no major weakness has been observed in the internal controls regarding purchase of inventory and fixed assets and sale of goods and services.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the said register.

(b) During the year the company has not purchased raw material from a company under the same management exceeding the value of five lakhs rupees at cost price.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

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

8. As informed to us, the company has initiated the process of maintaining cost records as has been prescribed by the Central Government u/s 209(1)(d) of the Companies Act, 1956, in respect of the sponge iron production activities carried on by the Company.

9. (a) The company is generally regular in depositing undisputed statutory dues including Staff Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, VAT, CST, Service Tax, Excise Duty, Cess and other material statutory dues applicable to it except as stated in Notes on Accounts - Clause No. 31

(b) According to the information and explanations given to us the following taxes were not deposited as the same were disputed in appeal at the end of the year:

Particulars Disputed Forum where dispute is pending in Amount (Rs.) appeal as on 31.03.2014

i) VAT Tax on Coal 15,08,910 Appellate Dy. Commissioner (CT), purchase (Net of Hyderabad Rural Division, payment)

ii) Income Tax for: Asst. Yr. 2003-04 2,43,395 Hon''ble ITAT, Kolkata. Asst. Yr. 2008-09 1,49,196 C.I.T. (Appeals)-C-lll, Kolkata. Asst. Yr. 2010-11 8,00,230 C.I.T. (Appeals)-C-lll, Kolkata.

iii) CENVAT on Capital 12,14,662 Commissioner of Customs, Central Goods(Net of Excise and Service Tax payment) (Appeals III), Hyderabad.

10. The Company does not have any accumulated past losses at the end of the financial year under review and has not incurred cash loss in the current financial year. There was no cash loss incurred in the immediately preceding financial year.

11. According to the information and explanations given to us and the records examined by us, the Company has not defaulted in repayment of dues to banks or any financial institutions. The company has not accepted any fund on account of issue of debentures.

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

13. In our opinion and according to the information and explanations given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

14. In our opinion, the Company has maintained proper records of the transactions and contracts for dealing in investments in shares and timely entries have been made therein. The investments made by the Company are held in its own name.

15. According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof could have been prima facie prejudicial to the interest of the Company.

16. As informed to us, the company has not taken any term loans during the year.

17. On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilized short term loans taken for any long term investments.

18. During the year the company has not made any preferential allotment of shares.

19. According to the information and explanations given to us, the company has not issued any debentures.

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

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

For A PRADHAN & ASSOCIATES, Chartered Accountants Firm Regd. No:325131E

Place: 28B, Kalidas Patitundi Lane, Kolkata - 700026.

Date: 30th May 2014

A. PRADHAN (Proprietor) Membership No: 053543

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Ashirwad Steels & Industries Limited, which comprise the Balance Sheet as at March 31,2013, 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 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 Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

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

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

(b) in the case of the Profit and Loss Account, of the profit 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 211 of the Companies Act, 1956;

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

Referred to in Paragraph 1 of the ''Report on other Legal & Regulatory Requirements'' of our report of even date on the accounts of Ashirwad Steels & Industries Ltd. for the year ended March 31, 2013:

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

(b) The fixed assets have been physically verified by the management as per a phased program of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(c) In our opinion, no substantial part of fixed assets employed by the company had been disposed off during the year.

2. (a) As explained to us the management has conducted physical verification of Inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and the book records were not material and have been properly dealt with in the books of accounts.

3. (a) The Company has not given any loan secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, the requirement of clausa (iii) (b), (iii) (c) & (iii) (d) of the order are not applicable since no loans have been given to companies, firms or parties covered under section 301 of the Companies Act, 1956.

(c) The company has not taken any loan from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(d) In our opinion, the requirement of clause (iii) f and (iii) g of the order is not applicable as the company has not taken any such loan which is covered under section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotation, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and with regard to the sale of goods, services and disposal of fixed.assets. During the course of our audit, no major weakness has been observed in the internal controls regarding purchase of inventory and fixed assets and sale of goods and services.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the said register.

(b) During the year the company has purchased raw material from a company under the same management exceeding the value of five lakhs rupees at cost price and the same was reasonable.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. As informed to us, the company has initiated the process of maintaining cost records as has been prescribed by the Central Government u/s 209(1 ){d) of the Companies Act, 1956, in respect of the sponge iron production activities carried on by the Company.

9. (a) The company is generally regular in depositing undisputed statutory dues including Staff Provident

Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, VAT, CST,

- Service Tax, Excise Duty, Cess and other material statutory dues applicable to it except as stated in

Notes on Accounts - Clause No.31

(b) According to the information and explanations given to us the following taxes were not deposited as the same were disputed in appeal at the end of the year:

Particulars Disputed Forum where dispute is pending in Amount (Rs.) appeal as on 31.03.2013

i) VAT Tax on Coal 15,08,910 Appellate Dy. Commissioner (CT), purchase (Net of Hyderabad Rural Division, payment)

ii) Income Tax for:

Asst. Yr. 2003-04 2,43,395 C.I.T. (Appeals)-C-lll, Kolkata.

Asst. Yr. 2008-09 1,49,196 C.I.T. (Appeals)-C-lll, Kolkata.

Asst. Yr. 2010-11 8,00,230 C.I.T. (Appeals)-C-I(l, Kolkata.

iii) CENVAT on Capital 12,14,662 Commissioner of Customs, Central Excise Goods(Netof payment) and Service Tax (Appeals III), Hyderabad.

-10. The Company does not have any accumulated past losses at the end of the financial year under review and has not incurred cash loss in the current financial year. However there was cash loss incurred in the immediately preceding financial year.

11. According to the information and explanations given to us and the records examined by us, the Company has not defaulted in repayment of dues to banks or any financial institutions. The company has not accepted any fund on account of issue of debentures.

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

13. In our opinion and according to the information and explanations given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund/ societies.

14. In our opinion, the Company has maintained proper records of the transactions and contracts for dealing in investments in shares and timely entries have been made therein. The investments made by the Company are held in its own name.

15. According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof could have been prima facie prejudicial to the interest of the Company.

16. As informed to us, the company has not taken any term loans during the year.

17. On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilized short term loans taken for any long term investments.

18. During the year the company has not made any preferential allotment of shares.

19. According to the information and explanations given to us, the company has not issued any debentures.

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

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

FOR A PRADHAN & ASSOCIATES

Chartered Accountants

Firm Regd. No:325131E

Place: 28B, K. P. Lane,

Kolkata - 700026.

A. PRADHAN

(Proprietor)

Date: 30th May 2013 Membership No: 053543

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Mar 31, 2010

1. We have audited the attached Balance Sheet of ASHIRWAD 9TEELS & INDUSTRIES LTD. as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

b. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from our examination of such books.

c. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

d. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

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

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

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010, and

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

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

Annexure to the Auditors Report. Referred to in Paragraph 3 of our report of even date on the accounts of Ashirwad Steels & industries Ltd. for the year ended March 31, 2010:

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

(b) The fixed assets have been physically verified by the management as per a phased program of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(c) In our opinion, no substantial part of fixed assets employed by the company had been disposed off during the year.

2. (a) As explained to us the management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and the book records were not material and have been properly dealt with in the books of accounts.

3. (a) The Company has not given any loan secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, the requirement of clause (iii) (b), (iii) (c) & (iii) (d) of the order are not applicable since no loans have been given to companies, firms or parties covered under section 301 of the Companies Act, 1956.

(c) The company has taken un-secured loans from three companies covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs.3,10,47,204/- and the year end balance of such loans was Rs. NIL.

(d) The rate of interest and other terms and conditions of un-secured loans taken by the company are prima facie not prejudicial to the interest of the company.

(e) The repayment of such loans including interest thereon were found to be regular and/or as per stipulation.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotation, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and with regard to the sale of goods, services and disposal of fixed assets. During the course of our audit, no major weakness has been observed in the internal controls regarding purchase of inventory and fixed assets and sale of goods and services.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements for loans taken referred to in section 301 of the Act have been entered in the said register.

(b) During the year there were no contracts or arrangements exceeding the value of five lakhs rupees with any concern listed in the register maintained under Section 301 of the Companies Act, 1956.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. As informed to us, the company has initiated the process of maintaining cost records as has been prescribed by the Central Government u/s 209(1 )(d) of the Companies Act, 1956, in respect of the sponge iron production - activities carried on by the Company.

9. (a) The company is generally regular in depositing undisputed statutory dues including Staff Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, VAT, CST, Service Tax, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us the following taxes were not deposited as the same were disputed in appeal at the end of the year:

Disputed Forum where dispute is pending in appeal

Amount (Rs.) As on 31.03.2010

Purchase Tax (Vat) on * 30,17,821 Appellate Dy. Commissioner (CT),

Coal purchase Hyderabad Rural Division.

Income Tax 15,79,364 Commissioner of Income Tax (Appeals)- C-lll, Kolkata.

* Out of the said disputed amount, Rs. 15.09 Lacs had been deposited till the year-ended 31.03.2010

(b) On the basis of a writ petition filed by the Company against State Governments order withdrawing remission of Sales Tax pursuant to imposition of VAT in the State; the Honble High Court of Jharkhand at Ranchi has allowed the benefit of deferment of tax for VAT and although the Honble High Court order is not specific about deferment of CST, the Company assumes that deferment order is applicable to both VAT and CST in respect of its sales from its Sponge Iron project at Jamshedpur. The company has accordingly shown deferred tax liability on account of CST Rs. 16,64,369/-and of VAT Rs.22,46,636/- as at the end of the year. This matter is pending for decision before the Honble Supreme Court.

10. The Company does not have any accumulated past losses at the end of the financial year under review and has not incurred any cash losses in the financial year. There was no cash loss incurred in the immediately preceding financial year.

11. According to the information and explanations given to us and the records examined by us, the Company has not availed or taken any loan from banks or any financial institutions and hence there is no default in repayment of loan. The company has not accepted any fund on account of debentures.

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

13. In our opinion and according to the information and explanations given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund/ societies.

14. In our opinion, the Company has maintained proper records of the transactions and contracts for dealing in investments in shares and in the share derivatives transactions and timely entries have been made therein. The investments made by the Company are held in its own name.

15. According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof could have been prima facie prejudicial to the interest of the Company.

16. As informed to us, the company has not taken any term loans during the year.

17. On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilized short term loans taken from body corporates (ICD) for any long term investments.

18. The company has made preferential allotment of 45, 00,000 equity shares during the year at Rs. 40 per share including premium of Rs. 30 each.

19. According to the information and explanations given to us, the company has not issued any debentures.

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

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



FOR, A PRADHAN & ASSOCIATES,

Chartered Accountants Place: 2D, Panditia Rd.,

Kolkata

Date: 31 th May, 2010 A. PRADHAN

(Proprietor)

Membership No: 053543

---

Mar 31, 2009

1. We have audited the attached Balance Sheet of Ashirwad Steels & Industries Ltd. as at 31st March 2009 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

b. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from our examination of such books.

c. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

d. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors as on 31st March 2009 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

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

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

2009, and

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

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

Referred to in Paragraph 3 of our report of even date on the accounts of Ashirwad Steels & Industries Ltd. for the year ended March, 31, 2009:

1. (a) The Company has maintained proper records showing full particulars, including quantitative

details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management as per a phased program of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(c) There was no disposal of fixed assets during the year.

2. (a) As explained to us the management has conducted physical verification of inventory at reasonable

intervals during the year.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and the book records were not material and have been properly dealt with in the books of accounts.

3. (a) The Company has not given any loan secured or unsecured to companies, firms or other parties

covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, the requirement of clause (iii) (b), (iii) (c) & (iii) (d) of the order are not applicable since no loans have been given to companies, firms or parties covered under section 301 of the Companies Act, 1956.

(c) The company has taken un-secured loans from three companies covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs.13,234,821/- and the year end balance of such loans was Rs. 10,033,500/-

(d) The rate of interest and other terms and conditions of un-secured loans taken by the company are prima facie not prejudicial to the interest of the company.

(e) The repayment of such loans including interest thereon were found to be regular and/or as per stipulation.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotation, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been observed in the internal controls regarding purchase of inventory and fixed assets and sale of goods and services.

5. (a) Based on the audit procedures applied by us and according to the information and explanations

provided by the management, we are of the opinion that the particulars of contracts or arrangements or loans taken referred to in section 301 of the Act have been entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the registers maintained under section 301 and exceeding the value of five lakhs rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. As informed to us, the company has initiated the process of maintaining cost records as has been prescribed by the Central Government u/s 209(1 )(d) of the Companies Act, 1956, in respect of the sponge iron production activities carried on by the Company.

9. (a) The company is generally regular in depositing undisputed statutory dues including Staff Provident

Fund, investor Education and Protection Fund, Employees State Insurance, Income Tax, VAT, CST, Service Tax, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us the fallowing taxes were not deposited as the same were disputed in appeal at the end of the year:

Disputed. Forum where dispute is pending in

Amount (Rs.) appeal As on 31.03.2009

Purchase Tax (Vat) on * 30,17,821 Appellate Dy. Commissioner (CT),

Coal purchase Hyderabad Rural Division.

Income Tax 15,79,364 Commissioner of Income Tax .

(Appeals)-C-lll, Kolkata.

* Out of the said disputed amount, Rs. 15.09 Lacs had been deposited till the year-ended 31.03.2009.

(c) On the basis of a writ petition filed by the Company against State Governments order withdrawing remission of Sales Tax pursuant to imposition of VAT in the State; the Honble High Court of Jharkhand at Ranchi has allowed the benefit of deferment of tax for VAT and although the Honble High Court order is not specific about deferment of CST, the Company assumes that deferment order is applicable to both VAT and CST in respect of its sales from its Sponge Iron project at Jamshedpur. The company has accordingly shown deferred tax liability on account of CST Rs. 24,93,949/- and of VAT Rs.33,69,392/- as at the end of the year. This matter is pending for decision before the Honble Supreme Court.

10. The Company does not have any accumulated past losses at the end of the financial year under review and has not incurred any cash losses in the financial year. There was no cash loss incurred in the immediately preceeding financial year.

11. According to the information and explanations given to us and the records examined by us, the Company has not availed or taken any loan from banks or any financial institutions and hence there is no default in repayment of loan. The company has not accepted any fund on account of debentures.

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

13. In our opinion and according to the information and explanations given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund/ societies.

14. In our opinion, the Company has maintained proper records of the transactions and contracts for dealing in investments in shares and in the share derivatives transactions and timely entries have been made therein. The investments made by the Company are held in its own name.

15. According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof could have been prima facie prejudicial to the interest of the Company.

16. As informed to us, the company has not taken any term loans during the year.

17. On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilized short term loans taken from body corporates (ICD) for any long term investments.

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

19. According to the information and explanations given to us, the company has not issued any debentures.

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

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

For A PRADHAN & ASSOCIATES

Chartered Accountants

Place: Kolkata A. Pradhan

Dated: 29,h June,2009 Partner

Membership No : 053543