Auditor Report of Gujarat NRE Coke Ltd.

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards, notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of 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 aforesaid financial statements give the information required by the Act, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

c) in the case of the Cash Flow Statement, of the cash flows of the Company 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 notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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 Act;

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 considered due and payable by the Company as on 31.03.2014.

Annexure to Independent Auditor''s Report Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

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

(b) We were informed that the Company has a phased programme of physical verification of all its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, fixed assets were physically verified by management during the period under review and no material discrepancy was noticed on such verification.

(c) Fixed assets disposed off during the year under review were not substantial and the going concern status of the company is not affected.

(ii) (a) During the year inventories have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) The Company has maintained proper records of inventory. We were explained that the discrepancies noticed during the physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us, the company has not granted or taken loans, Secured or Unsecured, to/from the companies, firm or other parties covered in the

Register maintained under section 301 of the Companies Act, 1956, consequently sub clauses (a) to (g) of clause (iii) of paragraph 4 of the order is not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. No major continuing weakness in internal control system was observed.

(v) (a) According to the information and explanations given to us, we are of the opinion that particulars of all the transactions made in pursuance of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of each party during the year have been made at prices which appear to be reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the

Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business but it has to be further strengthened.

(viii) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not carried out a detailed examination of such records, nor we are required to do so, with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Wealth Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues except Income Tax, Sales Tax and Service Tax where the amount has not been regularly deposited with the appropriate authorities and there has been delays in a large number of cases.

The Central Government has not notified the date of levy and collection of cess under Rehabilitation & Revival Fund as per section 441 A of the Companies act, 1956.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st March, 2014, for a period of more than six months from the date those became payable, except for the Sales Tax/VAT/CST and Income Tax as given below-

Name of the statute Nature of Dues Amount (Rs./Crores)

Gujarat Value Added Tax Act, 2003 Sales Tax/VAT/CST 11.18

Income Tax Act,1961 Income Tax 5.92

(c) According to the information and explanations given to us and the records of the company examined by us, there were no dues in respect of Income

Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited with the appropriate authorities other than disputed liabilities mentioned below:-

Name of the statute Nature of Amount Dues (Rs./Crores)

Income Tax Act, 1961 Regular Assessment 1.86

Finance Act, 1994 Service Tax 3.39 (Act 32 of 1994) Chapter V & VA

The Customs Act, 1962 Custom Duty 12.50

Period to which the Forum where/ Name of the Statute amount Relates disputes are pending

Income Tax Act 1961 2006-07 Commissioner of Income Tax 2010-11 (Appeals), Kolkata

Finance Act 1994 2007-08 Custom, Excise and Service to Tax Appellate Tribunal, 2011-12 Ahmedabad Commissioner (Appeals), Cental Excise, Rajkot

The Customs Act 1962 2004, 2005, 2007, Custom, Excise and Service Tax 2008, 2010 Appellate Tribunal, Ahmedabad..

(x) The Company does not have accumulated losses more than 50% of the networth of the Company as at 31st March, 2014. The Company has incurred cash losses during the year under review, there was no cash losses in the immediately preceding financial year.

(xi) The Company has defaulted in repayment of dues to banks and financial institutions in respect of Letters of Credit, Buyer''s Credit, Bills Discounting, Term Loan Installments, NCD installments and Interest. However during the year, the CDR proposal of the Company has been approved by the CDR Empowered Group (CDR EG) at its meeting held on 14th March 2014. As per approved CDR package, defaults during the year with CDR lenders have been regularised, except the following defaults which existing/continuing as on the Balance sheet date.

Particulars Delays up to Delays 31 Delays 91 - Delays beyond Total 30 days 90 day 180 days 180 days Amount

Installments/ Overdrawing 025 14.12 028 - 14.65

Interest liabilities 3.70 9.63 1.93 9.96 25.22

(xii) According to the informations and explanations given to us, the

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

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the order are not applicable to the company.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments have been held by the company in its own name except to the extent of exemption, if any, granted under section 49 of the Companies Act, 1956.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions, on the basis of which the Company has given guarantees for loans taken by the erstwhile subsidiary companies from banks or financial institutions, are not as such prima facie prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of account, the term loans were applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis were used for long term investment.

(xviii) The company, during the year, has allotted equity shares on preferential basis consequent upon conversion of Share warrants allotted to a company covered in Register maintained under Section 301 of the Companies Act,1956. The Price at which these shares have been issued has been determined as per Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000, which, in our opinion, is not prejudicial to the interest of the Company.

(xix) The company has not issued any debentures or bonds during the year under review.

(xx) The company has not raised any money by way of public issues during the year under review.

(xxi) Based upon the audit procedures followed for the purpose of reporting on the true and fair view of the financial statements and as per the information and explanations given by management, no fraud on or by the Company has been noticed or reported during the year.

For N.C.Banerjee & Co. Chartered Accountants (Firm''s Registration No. : 302081E)

A Paul Place : Kolkata (Partner) Dated : 25th May, 2014 Membership No. 06490

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Gujarat NRE Coke Limited ("the Company"), 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 ("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 March 31, 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") 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 (I) 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.

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

(b) We were informed that the Company has a phased programme of physical verification of all its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, fixed assets were physically verified by management during the period under review and no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year under review were not substantial and therefore do not affect the going concern status of the company.

(ii) (a) During the year inventories have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory.

The discrepancies noticed during the physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us, the company has not granted or taken loans, Secured or Unsecured, to/from the companies, firm or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 consequently sub clause (a) to (g) of clause 4 (iii) of the order is not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. No major weakness in internal control system was observed.

(v) (a) According to the information and explanations given to us, we are of the opinion that particulars of all the transactions made in pursuance of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

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

(viii) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the rescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of such records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with appropriate authorities during the year under review.

The Central Government has not notified the date of levy and collection of cess under Rehabilitation & Revival fund as per section 441 A of the Companies Act, 1956.

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

(x) The Company does not have accumulated losses at the year ended 31st March, 2013 and has not incurred cash losses during the year under review and in the immediately preceding 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 its banks or to any financial institutions or debenture holders.

(xii) According to the explanations given to us and based on the information available, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the order are not applicable to the company.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments have been held by the company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions, on the basis of which the Company has given guarantees for loans taken by the subsidiary companies from banks or financial institutions, are not as such prima facie prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of account, the term loans were applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment.

(xviii) The company has allotted shares consequent upon conversion of warrants allotted on preferential basis to a company covered in Register maintained under Section 301 of the Companies Act,1956 during the year. The Price at which these shares have been issued has been determined as per Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009, which in our opinion is not prejudicial to the interest of the Company.

(xix) According to the information and explanations given to us, the company issued secured non-convertible debentures and unsecured foreign currency convertible bonds during the year under review.(Refer Note no. 4)

(xx) The company has not raised any money by public issues during the year under review.

(xxi) 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 N.C.Banerjee & Co.

Chartered Accountants

(Firm''s Registration No. : 302081E)

A. Paul

Place : Kolkata (Partner)

Dated : 26th May, 2013 Membership No. 06490

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Gujarat NRE Coke Limited as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's 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 and on the basis of such checks of books and records of the company as we considered appropriate and according to the information and explanations given to us , we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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

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

(b) In our opinion, proper books of account as required by 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 dealt with by this report comply with the Accounting Standards referred to in sub- section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

(e) On the basis of written representations received from the directors as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at March 31, 2012 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 together with the significant accounting policies and notes appearing 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 March 31, 2012;

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

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

Annexure referred to in paragraph 3 of Audit Report of even date to the members of Gujarat NRE Coke Ltd. for the year ended 31st March 2012.

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

(b) We were informed that the Company has a phased programme of physical verification of all its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, fixed assets required to be verified were physically verified by management during the period under review and no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year under review were not substantial and therefore do not affect the going concern status of the company.

(ii) (a) During the year inventories have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us, the company has not granted or taken loans, Secured or Unsecured, to/from the companies, firm or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 consequently clause 4 (iii) of the order is not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. No major weakness in internal control system was observed.

(v) (a) According to the information and explanations given to us, we are of the opinion that particulars of all the transactions made in pursuance of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

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

(viii) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of such records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with appropriate authorities during the year under review.

The Central Government has not notified the date for collection cess under Rehabilitation & Revival fund as per Section 441 A of the Companies Act, 1956.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st March, 2012, for a period of more than six months from the date they became payable except Dividend Distribution Tax amounting to Rs. 9.37 Crores which has since been deposited.

(c) According to the information and explanations given to us and the records of the company examined by us, there were no dues in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute other than those as mentioned here-in-below:

Name of the statute Nature of Amount Period to which the Forum where/ Dues (Rs./Crores) amount Relates disputes are pending

Income Tax Act, 1961 Regular Assessment 8.29 2005-06, 2006-07, Income Tax Appellate Tribunal, 2007-08, 2008-09 Kolkata/

Commissioner of Income Tax (Appeals), Kolkata

Chapter V & VA of Service Tax 0.06 Oct'07 - Mar'08 Custom, Excise and Service Tax Finance Act, 1994 Appellate Tribunal, Ahmedabad. (Act 32 of 1994)

The Customs Act, 1962 Custom Duty 2.55 2004, 2005, 2008, Custom,Excise and Service Tax 2010 Appellate Tribunal, Ahmedabad.

(x) The Company does not have accumulated losses at the year ended 31st March, 2012 and has not incurred cash losses during the year under review and in the immediately preceding 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 its banks or to any financial institutions or debenture holders.

(xii) According to the explanation given to us and based on the information available, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of Clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments have been held by the company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions, on the basis of which the Company has given guarantees for loans taken by the subsidiary companies from banks or financial institutions, are not as such prima facie prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of account, the term loans were applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have 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) The Company has not issued any debentures during the year.

(xx) The company has not raised any money by public issues during the year under review.

(xxi) 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 N.C.Banerjee & Co. Chartered Accountants

(Firm's Registration No. : 302081E)

A Paul

Place : Kolkata (Partner)

Dated : 27th May, 2012 Membership No. 06490

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Gujarat NRE Coke Limited as at March 31, 2011 and the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's 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 and on the basis of such checks of books and records of the company as we considered appropriate and according to the information and explanations given to us , we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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

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

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

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

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable;

(e) On the basis of written representations received from the directors as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at March 31, 2011 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 together with the significant accounting policies in schedule 18 and notes appearing 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 March 31, 2011;

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

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

Annexure referred to in paragraph 3 of our report of even date to the members of Gujarat NRE Coke Ltd. for the year ended 31st March 2011.

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

(b) We were informed that the Company has a phased program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, fixed assets required to be verified were physically verified by management during the period under review and no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year under review were not substantial and therefore do not affect the going concern status of the company.

(ii) (a) During the year inventories have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us, the company has not granted or taken loans, Secured or Unsecured, to/from the companies, firm or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 consequently clause 4 (iii) of the order is not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. No major weakness in internal control system was observed.

(v) (a) According to the information and explanations given to us, we are of the opinion that particulars of all the transaction made in pursuance of the contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs 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.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

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

(viii) The Central Government has not prescribed rules for maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for Metallurgical coke business. The cost records are maintained for steel plants as per rules. We have broadly reviewed the accounts and records of the steel plant in this connection and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of such records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with appropriate authorities during the year under review.

The Central Government has not prescribed the amount of cess for Rehabilitation Revival fund payable under section 441 A of the Companies act, 1956.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, wealth Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st March, 2011, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the company examined by us, there were no dues in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute other than those as mentioned here-in-below:

Name of the statute Nature of Amount Period to which the Forum where Dues (Rs./ Crores) amount Relates disputes are pending

Income Tax Act, 1961 Regular Assessment 3.52 2005-06 Income Tax Appellate Tribunal Kolkata

-Do- -Do- 0.57 2006-07 Commissioner of Income Tax (Appeals), Kolkata

-Do- -Do- 0.33 2007-08 Commissioner of Income Tax (Appeals), Kolkata

Finance Act, 1994 Service Tax 0.06 Oct'07-Mar'08 Custom, Excise and Service Tax (Act 32 of 1994) Appellate Tribunal Ahmedabad

(x) The Company does not have accumulated losses at the year ended 31st March, 2011 and has not incurred cash losses during the year under review and in the immediately preceding 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 its banks or to any financial institutions or debenture holders.

(xii) According to the explanations given to us and based on the information available, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments have been held by the company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions, on the basis of which the Company has given guarantees for loans taken by the subsidiary companies from banks or financial institutions, are not as such prima facie prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of account, the term loans were applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment.

(xviii) The Company had allotted shares consequent upon conversion of warrants allotted on preferential basis to a company covered in Register maintained under Section 301 of the Companies Act, 1956 during the year. The Price at which these shares have been issued has been determined as per Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000, which in our opinion is not prejudicial to the interest of the Company.

(xix) According to the information and explanations given to us, the company issued secured non-convertible debentures during the year (Refer note no. B- 4 (a) of schedule 18)

(xx) The company has not raised any money by public issues during the year under review.

(xxi) 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 N.C.Banerjee & Co.

Chartered Accountants

( Firm's Registration No. : 302081E)

A. Paul

Place : Kolkata (Partner)

Dated : 15th July, 2011 Membership No. 06490

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Gujarat NRE Coke Limited as at March 31, 2010 and the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s 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 and on the basis of such checks of books and records of the company as we considered appropriate and according to the information and explanations given to us , we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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

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

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

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

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable;

(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 at March 31, 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 together with the significant accounting policies in schedule 18 and notes appearing 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 March 31, 2010;

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

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

Annexure referred to in paragraph 3 of our report of even date to the members of Gujarat NRE Coke Ltd. for the year ended 31st March 2010.

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

(b) We were informed that the Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, fixed assets required to be verified were physically verified by management during the period under review and no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year under review were not substantial and therefore do not affect the going concern status of the company.

(ii) (a) During the year inventories have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) During the year the company, has not granted loans, secured or unsecured, to companies, firm and others parties covered in the register maintained under section 301 of the Companies Act, 1956. Unsecured loan granted in the earlier year to its sub- subsidiary company (maximum amount due was Rs. 6.92 Crores during the year) has since been received in full.

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

(c) The sub-subsidiary company was regular in payment of interests, the principal amount of loan has been received in full during the year.

(d) There is no amount overdue in respect of loans granted by the company to parties covered in the registered maintained under Section 301 of the Companies Act, 1956.

(e) In our opinion and according to the information and explanations given to us, the company has not taken any loan from the companies, firm or other parties covered in the Register maintained under section 301 of the Companies Act, 1956, hence paragraph iii (f) and iii (g) of this order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. No major weakness in internal control system was observed.

(v) (a) According to the information and explanations given to us, we are of the opinion that particulars of all contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs 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.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

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

(viii) The Central Government has not prescribed rule for maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for Low-ash Metallurgical coke business. The cost records are maintained for steel plants as per rules. We have broadly reviewed the accounts and records of the steel plant in this connection and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of such records.

(ix) (a ) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with appropriate authorities during the year under review. Since the Central Government has, till date, not prescribed the amount of cess payable under Section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the cess.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, wealth Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st March, 2010, for a period of more than six months from the date they became payable.

(x) The Company does not have accumulated losses at the year ended 31st March, 2010 and has not incurred cash losses during the year under review and in the immediately preceding 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 its banks or to any financial institutions 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) In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi/ mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments have been held by the company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956.

(xv) I n our opinion and according to the information and explanations given to us, the terms and conditions, on the basis of which the Company has given guarantees for loans taken by the other companies from banks or financial institutions, are not as such prejudicial to the interests of the Company.

(xvi) In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of account, the term loans were applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us, the company issued secured non-convertible debentures during the year (Refer note no. B-4 (a) of schedule 18)

(xx ) The company has not raised any money by public issues during the year under review.

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

For N.C.Banerjee & Co.

Chartered Accountants

(Registration No. 302081E)

B Basu

(Partner)

Membership No. 12748

Place : Kolkata Dated : 30th May, 2010