Auditor Report of La Tim Metal & Industries Ltd.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of La Tim Metal & Industries Limited (‘the Company’), which comprise the balance sheet as at 31^st March 2018, the Statement of Profit and Loss (including other comprehensive income), and the Statement of Cash flows and the Statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS financial statements”).

Management’s Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 standalone Ind AS 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 Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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^st March, 2018, and its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“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, a statement on the matters specified in the paragraph 3 and 4 of the order.

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

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

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

c. The 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 Indian 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^st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; 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, wherever necessary, of pending litigations on its financial position in its financial statements;

ii. the Company has made provision, as required under the applicable law or Indian Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

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

ANNEXURE - A TO THE AUDITORS’ REPORT

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31^stMarch 2018, we report that:

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

b. The Company has a regular program of physical verification of its fixed assets. In accordance with this program, fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

c. According to the information and explanations given to us, none of the immovable properties as on the reporting date are held as Fixed Assets. Therefore, reporting under paragraph 3(i)(c) of the said Order is not applicable to the Company.

(ii) The inventory has been physically verified at reasonable intervals by the management. As explained to us, the discrepancies noticed on verification between the physical stocks and the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) As informed to us, the Company has granted unsecured loans to its wholly owned subsidiary company which is covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’).

a. In our opinion, the terms and conditions of the grant of such loans are not prejudicial to the company’s interest.

b. There is no specific repayment schedule fixed for the loan given by the company as the same is repayable on demand.

c. There is no outstanding balance of principal and interest which is overdue for more than 90 days, hence, reporting under this clause is not applicable.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

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

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.

(vii) (a) According to the records of the Company examined by us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Central Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess, Goods and Service Tax and other statutory dues applicable to it.

According to the information and explanations given to us, in our opinion no undisputed amounts payable in respect of statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Value Added Tax, Central Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess, Goods and Service Tax and other statutory dues applicable to it were in arrears as at the balance sheet date for a period of more than six months from the date they became payable.

(b) According to the records of the Company, there are no dues outstanding of Income Tax, Sales Tax (including Value Added Tax, Central Sales Tax and Goods and Service Tax), Service Tax, Custom Duty, Excise Duty or Cess on account of any dispute.

(viii) Based on our audit procedures and in our opinion and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to Banks. The company has not borrowed from financial institutions or debenture holders.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and according to the explanations given by the management, term loans were applied for the purposes for which loans were raised.

(x) Based upon the audit procedures performed and according to the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

(xi) The Company has not paid / provided managerial remuneration during the year and therefore paragraph 3(xi) of the Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Ind AS.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has complied with the provisions of section 42 of the Companies Act, 2013 in respect of preferential allotment of share warrants, out of which some warrant holders partly converted warrants into equity shares, during the year under audit. According to the information and explanations given by the management, we report that the aggregate amount of Rs. 285.32 Lacs was raised or received on issue of share warrants and on conversion of warrants into equity, the amount so raised have been used for the purpose for which the amount was raised.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

ANNEXURE - B TO THE AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of La Tim Metal & Industries Limited (“the Company”) as of 31^st March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Dhirubhai Shah & Co

Chartered Accountants

Firm’s registration number: 102511W

Harish B Patel

Place: Mumbai Partner

Date : 30^th May 2018 Membership number: 014427

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Mar 31, 2015

We have audited the accompanying standalone financial statements of LA TIM METAL & INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 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 thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, 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,

1) of the state of affairs of the Company as at 31st March, 2015, and

2) its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

a) As required by the Companies (Auditors' Report) Order, 2015 issued by the Central Government of India in terms of sub section (11) of section 143 of the Companies Act, 2013 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said order.

b) 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.

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

d) 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

e) 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.

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

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:

1) The Company does not have any pending litigations which would impact its financial position.

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

3) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to Independent Auditors' Report

With reference to the paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date:

i. In respect of the Fixed Assets:

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

(b) As explanation given to us the assets have been physically verified by the management and no discrepancies were noticed on such verification during the year.

ii. In respect of Inventories:

(a) The management has conducted physical verification of inventories at regular intervals during the year. In our opinion frequency of verification is reasonable.

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

a. The Company is maintaining proper records of inventories. As explained to us the discrepancies noticed on physical verification of inventory as compared to the books records were not material and have been properly dealt with in the books of account.

iii. In respect of loans, secured or unsecured, granted by company to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013:

Company has not granted any loan to the parties covered in the register maintained under section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information and explanations given to us there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls system.

v. The company has not accepted deposits from the public and therefore, the provisions of section 73 to 76 of the Companies Act, 2013 and rules there under are not applicable to the company.

vi. For maintenance of cost records, The Company has not been specified by the Central Government under sub-section (1) of section 148 of the Companies Act.

vii. In respect of Statutory Dues:

(a) According to the records of the Company and explanations provided by the company, there are no undisputed dues in respect of wealth Tax, Custom Duty, Excise Duty outstanding as on 31st march 2015 for a period of more than 6 months from the date they became payable except profession tax Rs 3,600 and Service tax Rs 13801.

(b) According to the records of the Company and explanations provided by the company, there are no disputed dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute.

(c) There is no unclaimed dividend to transfer into investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

viii. The company has incurred cash losses during the year covered by the audit and the immediately preceding financial year.

ix. The Company does not have any dues to a financial institution or banks.

x. The Company has not given any guarantee for loans taken by others from Banks and financial institutions.

xi. The company has not obtained any term loan from any bank or financial institutions.

xii. No fraud on or by the Company was noticed or reported during the year.

For Ravi Seth & Co. Chartered Accountants Firm Registration No.108757W

Sd/- Ravi Seth Proprietor Membership No: 016808 Place : Mumbai Date : 20th May 2015

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Mar 31, 2014

Report on the Financial Statements We have audited the accompanying financial statements of La Tim Metal & Industries 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

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

Auditors Responsibility

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

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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give in the prescribed manner the information required by the Act 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.

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 (Auditors'' Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to

in paragraph 1 above, we report that:

a) The operations of the company were stand still since August 2001. In view of change of management, the Company may commence in operation in foreseeable future. Hence, the accounts have been prepared on going concern basis.

b) Subject to the above we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit.

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

d) 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 accounts.

e) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement comply with 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.

f) On the basis of written representations received from the director as on March 31,2014 and taken on record by the Board of Directors of the Company, 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.

Annexure to Independent Auditor''s Report

With reference to the paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date:

I. In respect of Fixed Assets:

(a) During the year under audit, no record was provided regarding maintenance of the fixed assets. Hence, we are unable to comment on its verification, its frequency, material discrepancy (if any).

(b) The management has physically not verified the Tangible Fixed assets of the Company.

C) In our opinion and according to the information and explanations given to us, the company has not disposed off a substantial part of fixed assets during the year thereby affecting the going concern.

ii. In respect of Inventories:

During the year under audit the company has not done any business due to which no inventory stock record was presented to us. In view of above, we are unable to comment about:

(a) Physical verification of inventories by the management.

(b) Dealing with discrepancies notified on Physical verification

(c) Valuation of Inventories

(d) Its adherence to Accounting standard and normally accepted accounting principals.

iii. In respect of loans, secured or unsecured, granted or taken by company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

(a) The Company has not granted and taken any loans / secured or unsecured from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956.

(b) The Company has not granted and taken any loans / secured or unsecured from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Consequently, the requirement of Clause (iii)(b), (iii)(c) & (iii)(d) of paragraph 4 of the Order are not applicable..

iv. In our opinion and according to the information and explanations given to us, there are no internal control procedures in the company with regard to purchase of material, fixed assets and with regard to the sale of goods.

v. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act, 1956.

(a) We are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

(b) There are no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding Rs. Five Lakhs in respect of any party during the year.

vi. The company has not accepted deposits from the public and therefore, the provisions of section 58A and 58AA of the Companies Act, 1956 and rules there under are not applicable to the company.

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

viii. The Central Government has not prescribed the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956.

ix. a) As per the information and explanations given and records produced before us the salaries and wages have not been paid since March 1998 and are in arrears except for some advances paid in account/ Provident Fund contributions have accordingly neither been deducted not paid.

b) According to the records of the company and information and explanations given to us there were no undisputed amounts payable in respect of Wealth Tax, Customs Duty and Excise Duty outstanding as 31st March, 2014 for a period of more than 6 months from the date they became payable. The Company is in appeal before the Maharashtra State Sales Tax Tribunal for the disputed demand of Rs. 833397 under Bombay Sales Tax Act, 1959 and Rs. 14550577 under the Central Sales Tax Act, 1956.

x. As per the information and explanations given and records produced before us, the company is an S.S.I. unit and is, therefore, not a sick industrial company within the meaning of clause (O) of sub section (1) of section 3 of the Sick industrial companies (Special Provisions) Act, 1985.

xi. Based on our audit procedures and on the information and explanations given by the management, in our opinion, the company has not defaulted in repayment of due to banks.

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

xiii. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of paragraph 4(xiii) of the said order relating to compliance with the provisions of special statute are not relevant to the company.

xiv. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in securities.

xv. Based on the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The company has not obtained any term loan from any bank or financial institutions.

xvii. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that there are no funds raised on short term basis that have been used for long term investments and vise-versa.

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.

xix. According to the information and examinations given to us, during the period covered by our audit report, the company has not issued any debentures.

xx. According to the information and examinations given to us, the company has not made any public issue during the year and accordingly paragraph 4(xx) of the said order relating to end use of money raised is not applicable.

xxi. During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, notices or reported during the year, nor have we been informed of such case by the management.

For Ravi Seth & Co. Chartered Accountants Firm No. 108757W

Ravi Seth Proprietor Membership No. 016808

Place: Mumbai Date: 09/08/2014

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Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Drillco Metal Carbides Limited ("the Company"), which comprises of the Balance Sheet as at 31st March 2013, 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

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

Auditors Responsibility

3. 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.

4. 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 risk 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.

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

Opinion

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

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

b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date.

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

7. As required by the Companies (Auditors'' Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

8. Further to our comments in the Annexure referred to in paragraph 7 above, we report that:

a) The operations of the company were stand still since August 2001. In view of change of management, the Company may commence in operation in foreseeable future. Hence, the accounts have been prepared on going concern basis.

b) Subject to the above we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of ouraudit.

c) 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.

d) 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 accounts.

e) In our opinion, the Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in sub section (3C) of section 211 of the Act.

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

ANNEXURE REFERRED TO IN PARAGRAPH 7 OF THE REPORT OF THE AUDITORS FOR THE YEAR ENDED 31 ST MARCH 2013

To The members of

Drillco Metal Carbides Limited

1. a. During the year under audit, no record was provided regarding maintenance of the fixed assets. Hence, we are unable to comment on its verification, its frequency, material discrepancy (if any).

b. The management has physically not verified the Tangible Fixed assets of the Company.

c. In our opinion and according to the information and explanations given to us, the company has not disposed off a substantial part of fixed assets during the year thereby affecting the going concern.

2. During the year under audit the company has not done any business due to which no inventory stock record was presented to us. In view of above, we are unable to comment about:

a. Physical verification of inventories by the management.

b. Dealing with discrepancies notified on Physical verification.

c. Valuation of inventories

d. Its adherence to Accounting standard and normally accept accounting principals.

3. A) The company has not granted any secured or unsecured loans to companies, firms or other parties listed in the Register maintained under section 301 of the companies Act, 1956.

B) The company has taken unsecured loans, from companies, firms or other parties listed in the Register maintained under section 301 of the companies Act, 1956. In our Opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the company, are not prima facie prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are no internal control procedures in the company with regard to purchase of material, fixed assets and with regard to the sale of goods.

5. a. Accordingly to the information and explanations given to us, we are of the opinion that there are no transactions, other than the loans as referred to in Para 3 above, that need to be entered into the register maintained under section 301 of the companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, there are no transactions of purchase or sale made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the valued of five Lakhs rupees in respect of any party during the year.

6. The company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 for any of the activities of the company.

9. As per the information and explanations given and records produced before us the salaries and wages have not been paid since March 1998 and are in arrears except for some advances paid in account/ Provident Fund contributions have accordingly neither been deducted not paid.

10. According to the records of the company and information and explanations given to us there were no undisputed amounts payable in respect of Wealth Tax, Customs Duty and Excise Duty outstanding as 31st March, 2013 for a period of more than 6 months from the date they became payable. The Company is in appeal before the Maharashtra State Sales Tax Tribunal for the disputed demand of Rs. 833397 under Bombay Sales Tax Act, 1959 and Rs. 14550577 under the Central Sales Tax Act, 1956.

11. As per the information and explanations given and records produced before us, the company is an S.S.I, unit and is, therefore, not a sick industrial company within the meaning of clause (O) of sub section (1) of section 3 of the Sick industrial companies (Special Provisions) Act, 1985.

12. Based on our audit procedures and on the information and explanations given by the management, in our opinion, the company has defaulted in repayment of due to banks.

13. The company has not granted any loans and advances on the basis of Security by way of pledge of shares, debentures and other securities.

14. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of paragraph 4(xiii) of the said order relating to compliance with the provisions of special statute are not relevantto the company.

15. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in securities.

16. Based on the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

17. The company has not obtained any term loans during the year.

18. Based on the information and explanations given to us and on an Overall examination of the balance sheet of the company. In our opinion, there are no funds raised on a short term basis which have been used for long term investment, and vice versa.

19. 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.

20. According to the information and examinations given to us, during the period covered by our audit report, the company has not issued any debentures.

21. According to the information and examinations given to us, the company has not made any public issue during the year and accordingly paragraph 4(xx) of the said order relating to end use of money raised is not applicable.

22. During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, notices or reported during the year, nor have we been informed of such case by the management.

For Ravi Seth & Co.

(Chartered Accountants)

(Firm No. 108757W)

R. K. Seth Proprietor

Membership No. 016808

Place: Mumbai

Date: 30th May 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Drillco Metal Carbides Limited as at March 31, 2012, the Profit and Loss Account for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these statements based on our audit.

2. We have 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 presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out 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 in paragraph 3 above, we report that:

a) The operations of the company were stand still since August 2001. In view of change of management, the Company may commence in operation in foreseeable future. Hence, the accounts have been prepared on going concern basis.

b) Subject to the above we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit.

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

d) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account

e) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in sub section (3C) of section 211 of the Act.

f) On the basis of written representations received from the director as on March 31,2012 and taken on record by the Board of Directors of the Company, none of the directors is disqualified as on March 31,2012 from being appointed as a director in terms of clause (g) of sub section(l) of section 274 of the Act.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

1. In the case of the Balance Sheet, of the state of

affairs of the Company as at March31,2012; 2. In the case of the Profit and Loss Account, of the Loss for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE REPORT OF THE AUDITORS FOR THE YEAR ENDED 31ST MARCH 2012

To The members of

Drillco Metal Carbides Limited

1. a. During the year under audit, no record was

provided regarding maintenance of the fixed assets. Hence, we are unable to comment on its verification, its frequency, material discrepancy (if any).

b. The management has physically not verified the Tangible Fixed assets of the Company.

c. In our opinion and according to the information and explanations given to us, the company has not disposed off a substantial part of fixed assets during the year thereby affecting the going concern.

2. During the year under audit the company has not done any business due to which no inventory stock record was presented to us. In view of above, we are unable to comment about:

a. Physical verification of inventories by the management.

b. Dealing with discrepancies notified on Physical verification.

c. Valuation of inventories

d. Its adherence to Accounting standard and normally accept accounting principals.

3. A) The company has not granted any secured or unsecured loans to companies, firms or other parties listed in the Register maintained under section 301 of the companiesAct, 1956.

B) The company has taken unsecured loans, from companies, firms or other parties listed in the Register maintained under section 301 of thecompamesAct,1956. In our Opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the company, are not prima facie prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are no internal control procedures in the company with regard to purchase of material, fixed assets and with regard to the sale of goods.

5. a. Accordingly to the information and explanations given to us, we are of the opinion that there are no transactions, otherthan the loans as referred to in Para 3 above, that need to be entered into the register maintained under section 301 of the companiesAct, 1956. b. In our opinion and according to the information and explanations given to us, there are not transactions of purchase or sal made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the valued of five Lakhs rupees in respect of any party during the year.

6. The company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 for any of the activities of the company.

9. As per the information and explanations given and records produced before us the salaries and wages have not been paid since March 1998 and are in arrears except for some advances paid in account/ Provident Fund contributions have accordingly neither been deducted not paid.

10. According to the records of the company and information and explanations given to us there were no undisputed amounts payable in respect of Wealth Tax, Customs Duty and Excise Duty outstanding as 31 st March, 2012 for a period of more than 6 months from the date they became payable.

11. As per the information and explanations given and records produced before us, the company is an S.S.I, unit and is, therefore, not a sick industrial company within the meaning of clause (0) of sub section (1) of section 3 of the

Sick industrial companies (Special Provisions) Act, 1985.

12. Based on our audit procedures and on the information and explanations given by the management, in our opinion, the company has defaulted in repayment of due to banks.

13. The company has not granted any loans and advances on the basis of Security by way of pledge of shares, debentures and other securities.

14. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of paragraph 4(xiii) of the said order relating to compliance with the provisions of special statute are not relevant to the company.

15. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in securities.

16. Based on the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

17. The company has not obtained any term loans during the year.

18. Based on the information and explanations given to us and on an Overall examination of the balance sheet of the company. In our opinion, there are no funds raised on a short term basis which have been used for long term

investment, and vice versa.

19. 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, 1956during the year.

20. According to the information and examinations given to us, during the period covered by our audit report, the company has not issued any debentures.

21. According to the information and examinations given to us, the company has not made any public issue during the year and accordingly paragraph 4(xx) of the said order relating to end use of money raised is not applicable.

22. During the course of our examination of the

books of accounts carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, notices or reported during the year, nor have we been informed of such case by the management.

ForRaviSeth&Co.

(Chartered Accountants) (Firm No. 108757W)

Sd/- R.K.Seth

(Proprietor) Membership No.016808

Place: Mumbai

Date: 31stMay 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Drillco Metal Carbides Limited as at March 31, 2011, the Profit and Loss Account for the year ended on that date annexed thereto, which we have signed under reference to this report. Theses financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these statements based on our audit.

2. We have 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 presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out 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 in paragraph 3 above, we report that:

a) The operations of the company are stand still since August 2001. In spite of continued efforts by the management there is a serious doubt of its commencing operation in foreseeable future. In view of above we are unable to comment on the going concern assumption generally adopted while preparing financial statements.

b) Subject to the above we have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit.

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

d) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account

e) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in sub section (3C) of section 211 of the Act.

f) On the basis of written representations received from the director as on March 31,2011 and taken on record by the Board of Directors of the Company, none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Act.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

1. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

2. In the case of the Profit and Loss Account, of the Loss for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE REPORT OF THE AUDITORS FOR THE YEAR ENDED 31 ST MARCH 2011

1. a. During the year under audit, no record was provided regarding maintenance of the fixed assets. Hence, we are unable to comment on its verification, its frequency, material discrepancy (if any).

b. The management has physically not verified the Tangible Fixed assets of the Company.

c. In our opinion and according to the information and explanations given to us, the company has not disposed off a substantial part of fixed assets during the year thereby affecting the going concern.

2. During the year under audit the company has not done any business due to which no inventory stock record was presented to us. In view of above, we are unable to comment about:

a. Physical verification of inventories by the management.

b. Dealing with discrepancies notified on Physical verification.

c. Valuation of inventories

d. Its adherence to Accounting standard and normally accept accounting principals.

3. The company has neither granted not any loans, secured of unsecured, from companies, firms or other parties listed in the Register maintained under section 301 of the companies Act, 1956. As the company has not granted / taken any loans, secured or unsecured, to / from companies, Firm etc., listed in the register maintained under section 301 of the Act, paragraphs 4(iii)(b), 4(iii)(c ) and 4(iii)(d) of the Order are not applicable. The company has taken interest free unsecured loan of Rs. 27371100/- from 5 entities being companies, firms or other parties listed in the Register maintained under section 301 of the companies Act, 1956. There are no terms stipulated for repayment of such loan.

4. In our opinion and according to the information and explanations given to us, there are no internal control procedures in the company with regard to purchase of material, fixed assets and with regard to the sale of goods.

5. a. Accordingly to the information and explanations given to us, we are of the opinion that there are no transactions, other than the loans as referred to in Para 3 above, that need to be entered into the register maintained under section 301 of the companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, there are not transactions of purchase or sale made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the valued of five Lakhs rupees in respect of any party during the year.

6. The company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the company does not have an internal audit system commensurate with the size and nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 for any of the activities of the company.

9. As per the information and explanations given and records produced before us the salaries and wages have not been paid since March 1998 and are in arrears except for some advances paid in account/ Provident Fund contributions have accordingly neither been deducted not paid.

10. According to the records of the company and information and explanations given to us there were no undisputed amounts payable in respect of Wealth Tax, Customs Duty and Excise Duty outstanding as 31st March, 2004 for a period of more than 6 months from the date they became payable.

11. As per the information and explanations given and records produced before us, the company is an S.S.I. unit and is, therefore, not a sick industrial company within the meaning of clause (O) of sub section (1) of section 3 of the Sick industrial companies (Special Provisions) Act, 1985.

12. Based on our audit procedures and on the information and explanations given by the management, in our opinion, the company has defaulted in repayment of due to banks.

13. The company has not granted any loans and advances on the basis of Security by way of pledge of shares, debentures and other securities.

14. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of paragraph 4(xiii) of the said order relating to compliance with the provisions of special statute are not relevant to the company.

15. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in securities.

16. Based on the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

17. The company has not obtained any term loans during the year.

18. Based on the information and explanations given to us and on an Overall examination of the balance sheet of the company. In our opinion, there are no funds raised on a short term basis which have been used for long term investment, and vice versa.

19. 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.

20. According to the information and examinations given to us, during the period covered by our audit report, the company has not issued any debentures.

21. According to the information and examinations given to us, the company has not made any public issue during the year and accordingly paragraph 4(xx) of the said order relating to end use of money raised is not applicable.

22. During the course of our examination of the books of accounts carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, notices or reported during the year, nor have we been informed of such case by the management.

For Ravi Seth & Co. (Chartered Accountants) (Firm No. 108757W)

R. K. Seth (Proprietor) Membership No. 016808

Place: Mumbai Date : 31st May 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Drillco Metal Carbides Limited as at March 31, 2010, the Profit and Loss Account for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 have 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 ouropinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out 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 in paragraph 3 above, we report that:

(a) The operations of the company are stand still since August 2001. In spite of continued efforts by the management there is a serious doubt of its commencing operations in foreseeable future. In view of above we are unable to comment on the going concern assumption generally adopted while preparing financial statements.

(b) Subject to the above we have obtained all the information and Explanation which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

(d)The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account

(e) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of Section 211 of the Act;

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

(g) In ouropinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(2) in the case of the Profit and Loss Account, of the Lossforthe year ended on that date.



Annexure referred to in Paragraph 3 of the Report of the Auditors

To the Members of

Drillco Metal Carbides Limited for the year ended

March 31,2010:

1. a. During the year under audit, no record was provided regarding maintenance of the fixed assets. Hence, we are unable to comment on its verification, its frequency, material discrepancy (if any).

b. The management has physically not verified the Tangible Fixed assets of the Company.

c. In our opinion and according to the information and explanations given to us, the Company has not disposed off a substantial part of fixed assets during the year thereby affecting the going concern.

2. During the year under audit the company has not done any business due to which no inventory stock record was presented to us. In view of above, we are unable to comment about:

a) Physical verification of inventories by the management.

b) Dealing with discrepancies notified on physical verification.

c) Valuation of inventories.

d) Its adherence to Accounting Standards and normally accepted accounting principals.

3. The Company has neither granted nor taken any loans, secured or unsecured, from Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. As the Company-has not granted / taken any loans, secured or unsecured, to / from Companies, firms etc., listed in the register maintained under section 301 of the Act, paragraphs 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are no internal control procedures in the Company with regard to purchase of material, fixed assets and with regard to the sale of goods.

5. a. According to the information and explanations given to us, we are of the opinion that there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, there are no transactions of purchase or sale made in pursuance of contracts or 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.

6. The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company does not have an internal audit system commensurate with the size and nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 for any of the activities of the Company.

9. As per the information and explanations given and records produced before us the salaries and wages have not been paid since March 1998 and are in arrears except for some advances paid in account. Provident Fund contributions have accordingly neither been deducted nor paid.

10. According to the records of the company and information and explanations given to us there were no undisputed amounts payable in respect of Wealth Tax, Customs Duty and Excise Duty outstanding as 31 st March, 2004 for a period of more than 6 months from the date they became payable.

11. As per the information and explanations given and records produced before us, the Company is an S.S.I.unit and is, therefore, not a sick industrial company within the meaning of Clause (O) of sub section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

12. Based on our audit procedures and on the information and explanations given by the management, in our opinion, the Company has defaulted in repayment of dues to banks.

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

14. In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore the provisions of paragraph 4(xiii) of the said Order relating to compliance with the provisions of special statute relevant to chit fund and nidhi/mutual benefit/societies are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

16. Based on the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks orfinancial institutions.

17. The Company has not obtained any term loans during the year.

18. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment, and vice versa.

19. 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.

20. According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures.

21. According to the information and explanations given to us, the Company has not made any public issue during the year and accordingly paragraph 4(xx) of the said Order relating to end use of money raised is not applicable.

22. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Ravi Seth & Co.

(Chartered Accountant)

(Firm No. 108757W)



R. K. Seth

(Proprietor)

Membership No. 016808

Place: Mumbai

Date: 10.5.2010