Auditor Report of Electrotherm (India) Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial statements of Electrotherm (India) Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2025, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, Statement
of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us read with the notes to accounts, except for
the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements
give the information required by the Companies Act, 2013, as amended (the "Act") in the manner so required and give a true and fair view
in conformity with the Indian Accounting Standards prescribed under section 133 of the Act, ("Ind AS") and other accounting principles
generally accepted in India, of the state of affairs of the Company as at March 31, 2025 and its Profit, total comprehensive income, its cash
flow and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 38 of non-provision of interest on NPA account of Asset Reconstruction Company, on approximate basis of
Rs.131.80 Crore, for the year under consideration and the total amount of such unprovided interest till date is Rs. 916.51 Crore. The exact
amounts of the said non provision of interest are not determined and accordingly the amount of Net Profit for the year is overstated by Rs.
131.80 crore and the amount of ARC liability and Total retained earnings/(loss) as on March 31, 2025 is understated by Rs. 916.51 crore.
Our audit reports for the previous year ended March 31, 2024 was also qualified in respect of this matter.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), specified under
section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those Standards are further described in the Auditor''s
Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements
that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder,
and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. 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 statement.

Emphasis of Matter

We draw attention to the following Notes of Statement of Standalone Audited Financial Statements of the Company:

(a) Note No 15(c), 15(f), 15(g) and 36 in respect of non-payment of Instalments and Interest due, terms and conditions of the settlement
agreement prescribing for restoration of loan amount to the original amount in case of default on account of non-compliance of
said terms and conditions and treatment in the books of accounts of the assignment / settlement of debts of Asset Reconstruction
Company (ARC) and Bank.

(b) Note No 18 which describes the redemption of non-cumulative redeemable preference shares amounting to Rs 12.00 Crore that
were due for redemption. The Company has filed a petition under Section 55(3) of the Companies Act, 2013, before the Hon''ble
National Company Law Tribunal (NCLT) seeking approval for issue of Non-cumulative Redeemable Preference Shares to the existing
preference shareholders of the amount equivalent to the amount of the unredeemed preference shares on the same terms and the
matter is currently pending for further consideration.

(c) Note No 32(a), 37 and 41 in respect of pending enquiries / notices / summons / litigation recovery / fraud proceedings against the
Company and the Directors of the Company.

(d) Note No 37(d)(iii) in respect of search conducted by Directorate of Enforcement, Zonal Office, Ahmedabad (ED) at the Corporate
Office & factory of the company at Palodia and at the residence of Mr. Shailesh Bhandari on January 10, 2025 and consequent order
of freezing certain bank accounts and vehicles by the ED.

(e) Note No 39(b) in respect of confirmation / reconciliation of few accounts of ''''Trade Receivables", "Trade Payables", "Advance from
Customers", Advances Recoverable in Cash or Kind", and "Advance to suppliers and other parties".

(f) Note no. 43 which describes the execution of a Family Settlement Agreement (FSA) among the members of the Bhandari Family, who
are part of the promoter group/shareholders of the Company. The agreement seeks to resolve inter se family and business matters
and potentially result in changes to the shareholding and control of group entities.

In our opinion in respect of the above Emphasis of Matter, we do not provide any modified opinion, as these are not material / quantifiable
/ relevant for the accounting purpose, for the year under consideration.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Financial
Statements for the financial year ended on March 31, 2025. These matters were addressed in the context of our audit of the standalone
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In
addition to the matter described in the Basis for Qualified Opinion section, we have determined the matters described below to be the
key audit matters to be communicated in our report.

Key Audit Matters (Other than those given in Basis for Qualified Opinion)

Auditor''s Response

Recognition of Bad Debts on Disputed Trade Receivables Previously Provided for under Expected Credit Loss Model • As disclosed in Note 39(g) to the financial statements, the Company has written off certain trade receivables as bad debts during the year. These receivables were subject to ongoing disputes and/or the inability of the customers to make payments. The disputes and financial difficulties faced by the customers resulted in the non¬ recovery of the receivable amounts. • The Company had previously recognized provisions against trade receivables under the Expected Credit Loss (ECL) model in accordance with the applicable financial reporting framework. The bad debts written off during the year reflect the crystallization of credit losses that were earlier estimated and provided for. • Given the significance of the trade receivables, the judgment involved in identifying irrecoverable balances, and the linkage to previously recognized ECL provisions, we considered the recognition of bad debts on these disputed and defaulted trade receivables as a key audit matter.

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: • Reviewing the details of the disputed and defaulted receivables written off during the year, including supporting documentation such as customer communications and legal correspondence; • Evaluating management''s assessment of non¬ recoverability and ensuring that the write-offs were appropriately authorized and supported by evidence of failed recovery efforts; • Verifying that the bad debts written off were previously covered by ECL provisions and ensuring the appropriate reversal or utilization of provisions in accordance with the applicable accounting standards; • Assessing the adequacy and accuracy of the disclosures in the financial statements relating to the nature, amount, and treatment of the bad debts written off.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s management and Board of Directors are responsible for the preparation of the other information. The other information
comprises the information included in the Board''s report, Management Discussion and Analysis, Corporate Governance and Shareholder''s
Information, but does not include the Standalone Financial Statements and our auditors'' report thereon. These Company''s Annual Report
is expected to be made available to us after the date of this audit report.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial
statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Company''s annual report, if we conclude that there is a material misstatement therein, we are required to communicate
the matter to those charged with governance and take necessary action as, applicable under the relevant applicable laws and regulations.

Responsibilities of Management for the Standalone Financial Statements

The Company''s management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to
the preparation and presentation of these Standalone Financial Statement that gives a true and fair view of the state of affairs, profit
and other comprehensive Income, change in equity and cash flow of the Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standard (Ind AS) specified under Section 133 of the Act. The Management and Board
of Directors of the Company are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the Standalone Financial Statement that give a true and fair view and
are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statement, the management and Board of Directors are responsible for assessing the ability of the
Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the management and the Board of Directors either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the financial reporting process of the Company.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also: -

• Identify and assess the risks of material misstatement of standalone financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has
adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management and Board of Directors.

• Conclude on the appropriateness of managements'' and Board of Directors'' use of the going concern basis of accounting in
preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the
standalone financial Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to
continue as a going concern.

• Evaluate the overall presentation, structure, and content of the standalone financial statements, including the disclosures,
and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.

• Obtain sufficient appropriate audit evidence regarding the standalone financial statement of the Company to express an opinion on
the standalone financial statement.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, make it probable
that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work: and
(ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the standalone financial statements for the financial year ended March 31, 2025 and are therefore the key audit matters. We
describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

(A) As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of
Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to
the extent applicable for the year under consideration.

(B) As required by Section 143(3) of the Act and read with the notes to accounts, based on our audit and the explanations given to us by
the company, we broadly report to the extent applicable, 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) Except for the effect of the matters described in the Basis for Qualified Opinion paragraph above, 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 including the Statement of Other Comprehensive Income, the Statement
of Cash Flow and Statement of Changes in Equity for the year then ended dealt with by this report are in agreement with the
books of account;

(d) Except for the effect of the matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid
standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act;

(e) The matter described in ''Qualified Opinion'' and ''Emphasis of Matter'' paragraph above, in our opinion, may have an adverse
effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March 31, 2025, taken on record by the Board
of Directors, none of the directors of the Company is disqualified as on March 31, 2025, from being appointed as a director in
terms of Section 164(2) of the Act;

(g) The qualification relating to other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;

(h) With respect to the adequacy of the internal financial controls with reference to the standalone financial statements of the
Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

(i) The company has not paid any managerial remuneration to its directors and thus, the provisions of section 197 read with
Schedule V of the Act are not applicable to the Company for the year ended March 31, 2025.

(j) With respect to the other matters to be included in the auditors'' report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the
explanations given to us: -

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements-
Please Refer Note No. 32(a), 37 and 41 to the Standalone Financial Statements;

ii. There are no long-term contracts including derivative contracts and accordingly no provision is required to be made for
any loss from the same;

iii. There is no fund which is pending to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that, to the best of its knowledge and belief, as disclosed in the note 42(v),

no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities
("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall,
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, as disclosed in the note 42(vi), no
funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on

behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries; and

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing
has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule
11(e), as provided in (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

vi. Based on our examination which included test checks, the company has used an accounting software for maintaining its
books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across
any instance of audit trail feature being tampered with.

For, Hitesh Prakash Shah & Co

(Firm Regd.no: 127614W)
Chartered Accountants

Hitesh Shah

Partner

Place: Palodia Membership No. 124095

Date: May 20, 2025 UDIN: 25124095BMILBJ2902

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Mar 31, 2024

We have audited the accompanying standalone financial statements of Electrotherm (India) Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us read with the notes to accounts, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024 and its Profit and total comprehensive income, its cash flows and changes in equity for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 38(b) of non- provision of interest on NPA account of bank, on approximate basis of Rs. 116.10 Crore, for the year under consideration and the total amount of such unprovided interest till date is Rs. 784.72 Crore. The exact amounts of the said non provisions of interest are not determined and accordingly the amount of Net Profit for the year is overstated by Rs. 116.10 crore and the amount of Bank/ARC liability and Total retained earnings / (loss) as on March 31,2024 is understated by Rs. 784.72 crore. Our audit reports for the previous year ended March 31, 2023 was also qualified in respect of this matter.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), specified under section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. 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 statement.

Emphasis of Matter

We draw attention to the following Notes of Statement of standalone audited financial statements of the Company:

(a) Note No 15(c) in respect of delayed / non-payment of Principal and Interest due to the lenders of the loan and the lenders are yet to confirm the revised repayment schedule.

(b) Note No 15(f) related to default in complying with the terms and conditions of the settlement entered with the Bank / ARCs and the uncertainty about the amount of final liability of the Company.

(c) Note No 15(g) and Note No 36 in respect of defaults in repayment of the loan and treatment in the books of account of the assignment / settlement of the debts of various banks and the financial Institutions.

(d) Note No 32(a)(viii), 37 and 41 in respect of pending enquiries / notices / summons / litigation / recovery / fraud proceedings against the Company and the Directors of the Company.

(e) Note No 39(b) & (e) in respect of confirmation / reconciliation / regrouping and classification of few accounts of "Trade Receivables", "Trade Payable", "Advance from Customers", "Advances Recoverable in Cash or Kind", and "Advance to suppliers and other parties" and the amount of inventories as the same are taken by the management.

In our opinion in respect of the above Emphasis of Matter, we do not provide any modified opinion, as these are not material / quantifiable / relevant for the accounting purpose, for the year under consideration.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2024. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters (Other than those given in Basis for Qualified Opinion)

Auditor''s Response

Accounting for Revenue from Contracts with Customers The Company''s revenue comprises of revenue sale of Induction Furnace, Casting Machines, Transformers, Sponge and Pig Iron, Ferrous and Non-Ferrous Billets / Bars / Ingots, Duct Iron Pipes, Battery Operated Vehicles and Services relating to Steel Melting and Other Capital Equipment. The total revenues for the year amounted to Rs. 4271.50 Crore. Revenue from sale of goods is recognised when control is transferred to the customers. This requires detailed analysis of each contract regarding timing of revenue recognition. Inappropriate assessment could lead to risk of revenue getting recognised before control has been transferred. Accordingly, timing of recognition of revenue is a key audit matter.

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: • We assessed the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards. • We performed substantive testing by selecting samples of revenue transactions, recorded during the year by testing the underlying documents on test basis. • We performed confirmation procedures on selected customer balances at the balance sheet date. • We tested, on a sample basis, specific revenue transactions recorded before and after the financial year end date to determine whether the revenue had been recognised in the appropriate financial period.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Board''s report, Management Discussion and Analysis, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditors'' report thereon. These reports are expected to be made available to us after the date of this audit report.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Company''s annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and describe actions applicable under the applicable laws and regulations.

Responsibilities of Management for the Standalone Financial Statements

The Company''s management and Board of Directors are responsible for matter stated in Section 134(5) of the Act, with respect to the preparation and presentation of these standalone financial statements that gives 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 Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management and the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:-

• Identify and assess the risks of material misstatement of standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represents the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the Company to express an opinion on the financial statements.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, make it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work: and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2024 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

(A) As required by the Companies (Auditors'' Report) Order, 2020 ("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 paragraphs 3 and 4 of the Order, to the extent applicable for the year under consideration.

(B) As required by Section 143(3) of the Act and read with the notes to accounts, based on our audit and the explanations given to us by the Company, we broadly 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) Except for the effect of the matters described in the Basis for Qualified Opinion paragraph above, 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 including Other Comprehensive Income, Statement of Cash Flow and Statement of Changes in Equity dealt with by this report are in agreement with the books of account;

(d) Except for the effect of the matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act;

(e) The matter described in ''Qualified Opinion'' and ''Emphasis of Matter'' paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March 31, 2024, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024, from being appointed as a director in terms of Section 164(2) of the Act;

(g) The qualification relating to other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;

(h) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

(i) The Company has not paid any managerial remuneration to its directors and thus, the provisions of section 197 read with Schedule V of the Act are not applicable to the Company for the year ended March 31, 2024.

(j) With respect to the other matters to be included in the auditors'' report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: -

i. The Company has disclosed the details / impact of pending litigations on its financial position in its standalone financial statements- Please Refer Note No. 32(a), 37 and 41 to the standalone financial statements;

ii. There are no long-term contracts including derivative contracts and accordingly no provision is required to be made for any loss from the same;

iii. There is no fund which is pending to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that, to the best of its knowledge and belief, as disclosed in the note 42(v), no funds

have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, as disclosed in the note 42(vi), no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided in (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

vi. Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

For, Hitesh Prakash Shah & Co

(Firm Regd.no: 127614W) Chartered Accountants

Hitesh Shah

Partner

Place: Ahmedabad Membership No. 124095

Date: May 20, 2024 UDIN: 24124095BKAYTE4681

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Mar 31, 2023

Electrotherm (India) Limited.

Report on the audit of the Standalone Financial Statements Qualified

Opinion

We have audited the accompanying standalone financial statements of Electrotherm (India) Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us read with the notes to accounts, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (the "Act") in the manner so required, and give a true and fair view in conformity with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its Loss, total comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 37(b) of non- provision of interest on NPA accounts of banks, on approximate basis of Rs.102.27 Crore, for the year under consideration and the total amount of such unprovided interest till date is Rs.668.62 Crore. The exact amounts of the said non provisions of interest are not determined and accordingly the amount of Net Loss for the year is understated by Rs. 102.27 crore and the amount of Bank/ARC liability and Total retained earnings/(loss) as on March 31,2023 is understated by Rs. 668.62 crore. Our audit reports for the previous year ended March 31, 2022 was also qualified in respect of this matter.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. 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 statement. Emphasis of Matter

We draw attention to the following Notes of Statement of Standalone Audited Financial Statements of the Company:

(a) Note No 8(d) in respect of pending appeal filed against order of DRT Ahmedabad filed for sale of property of the Wholly owned subsidiary M/s Hans Ispat Limited and provision of expected credit losses / provision for doubtful debt on the balances outstanding of the said subsidiary and impairment in value of investment.

(b) Note No 15(c) in respect of non-payment of major Installments due to lenders of the loan for the period from June 30, 2020 to March 31, 2023 and major of the Interest due for the period from September 30, 2020 till March 31, 2023 and the lenders are yet to confirm the revised repayment schedule.

(c) Note No 15(f) related to default in complying with the terms and conditions of settlement entered with the Banks / ARCs (other than Central Bank of India) and the uncertainty about the amount of final liability. The impact of the settlement of Central Bank of India, will be given on the compliance of all the terms and conditions of the agreement.

(d) Note No 32(a)(ix) and 40 in respect of pending enquiries/notices/summons/litigation and recovery proceedings against the company and the Directors of the Company.

(e) Note No 36 in respect of defaults & recovery proceedings against the company and for the treatment in the books of account of the assignment / settlements of debts of various banks and the financial institutions.

(f) Note No 36(a)(vi)(f) related to petition filed under section 7 of the Insolvency and Bankruptcy Code, 2016 before the Hon''ble National Company Law Tribunal (NCLT), Ahmedabad for initiating Corporate Insolvency Resolution Process (CIRP) against the Company by Edelweiss Asset Reconstruction Company Limited.

(g) Note No 36(a)(vi)(g) related to statutory demand notice issued by Edelweiss Asset Reconstruction Company Limited under section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI") read with Security Interest (Enforcement) Rules, 2002 to discharge the liabilities.

(h) Note No 38(b) & (e) in respect of confirmation / reconciliation / regrouping and classification of few accounts of "Trade Receivables", "Trade Payable", "Advance from Customers", "Advances Recoverable in Cash or Kind", and "Advance to suppliers and other parties" and the amount of inventories as are taken by the management.

In our opinion in respect of the above Emphasis of Matter, we do not provide any modified opinion, as these are not material/quantifiable/ relevant for the accounting purpose, for the year under consideration.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters (Other than those given in Basis for Qualified Opinion)

Auditor''s Response

Impairment of Investment in equity shares of Subsidiary M/s Hans Ispat Limited. (Refer note 8(d) of the standalone financial statement) As at March 31 2023, the carrying amount of investment in equity shares of Hans Ispat Limited amounted to Rs Nil Crore net off impairment losses of Rs 36.46 crore. The management at each reporting date assesses if there are any further indicators that the investment in subsidiary are impaired and, if indicators exist, performs an impairment analysis on these investments by making an estimate of recoverable amount, being the higher of fair value less costs to sell and value in use. The recoverable amount of the investment in subsidiary are assessed based on complex assumptions that require the management to exercise their judgment such as future expected revenue, future expected revenue growth rate, gross margins, future cash flows and determination of historical trends. As a result, the Company recorded a total impairment as on March 31, 2023 of Rs. 36.46 crores (for the year ended March 31, 2022 Rs. Nil) against said investment. We focused on this area due to significant carrying amount of the investment in Hans Ispat Limited and the significant management judgement and estimates involved in making an estimate of the recoverable amount.

We performed the following principal audit procedures in relation to management''s estimation of recoverable amount of investment in Hans Ispat Limited. • We have obtained an understanding of management''s processes with regard to identifying existence and testing the impairment in the value of investment in the subsidiary. • We have also obtained and verified the latest financial statements of the subsidiary regarding the present level of operations and profitability of the subsidiary. • We have also reviewed the DRT order for sale of the subsidiary property. Further action taken by the management and the lender as described in Note No 8(d) of the Financial Statements. • Refer Para (a) in Emphasis of Matter. • We read and tested the disclosures in the notes to standalone financial statements which are as per the relevant accounting standards.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Board''s report, Management Discussion and Analysis, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the Standalone Financial Statements and our auditors'' report thereon. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the other information identified above, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance as required under SA 720 ''The Auditor''s responsibilities Relating to Other Information''. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company''s management and Board of Directors are responsible for matter stated in section 134(5) of the Act, with respect to the preparation and presentation of these Standalone Financial Statement that gives 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 Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Financial Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations , or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:-

• Identify and assess the risks of material misstatement of standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the standalone financial statement, including the disclosures, and whether the standalone financial statement represents the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, make it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work: and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

(A) As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable for the year under consideration.

(B) As required by Section 143(3) of the Act and read with the notes to accounts, based on our audit and the explanations given to us by the company, we broadly 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 as at March 31, 2023, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow and Statement of Changes in Equity for the year then ended dealt with by this report are in agreement with the books of account;

(d) In our opinion, the standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act;

(e) The matter described in ''Qualified Opinion'' and ''Emphasis of Matter'' paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023, from being appointed as a director in terms of Section 164(2) of the Act;

(g) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

(h) The company has not paid any managerial remuneration to its directors and thus, the provisions of section 197 read with Schedule V of the Act are not applicable to the Company for the year ended March 31, 2023.

(i) With respect to the other matters to be included in the auditors'' report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:-

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements-Please Refer Note No.32(a), 36 and 40 to the Standalone Financial Statement;

ii. There are no long-term contracts including derivative contracts and accordingly no provision is required to be made for any loss from the same;

iii. There is no fund which is pending to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that, to the best of its knowledge and belief, as disclosed in the note 41(v), no

funds (which are material either individually or in aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, as disclosed in the note 41(vi), no funds (which are material either individually or in aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided in (a) and (b) above, contain any material misstatement.

v. The Company has not declared any dividend during the year.

For, Hitesh Prakash Shah & Co

(Firm Regd.no: 127614W) Chartered Accountants

Hitesh Shah

Partner

Place: Ahmedabad Membership No. 124095

Date: May 27, 2023 UDIN:23124095BGXFQZ8003

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Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of ELECTROTHERM (INDIA) LTD (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including the Statement of Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “Standalone Financial Statements”).

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 State of Affairs (Financial Position), Profit or Loss (Financial Performance including Other Comprehensive Income), Cash Flows and Statement of 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 the Companies (Indian Accounting Standards) Rules, 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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 Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone 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 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 Standalone Financial Statements.

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

Basis for Qualified Opinion

1. We draw attention to Note No. 34(e) of non- provision of interest on NPA accounts of banks of’ 192.70 Crores (Previous Year ‘ 219.63 Crore), for the year under consideration and the total amount of such unprovided interest till date is ‘ 752.04 Crore (Previous Year ‘ 801.76 Crore).The exact amounts of the said non provisions of interest are not determined and accounted for by the Company and to that extent Bankers loan liabilities are understated and profit is overstated.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us read with the notes to accounts, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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, including Ind AS specified under Section 133 of the Act, of the State of Affairs (Financial Position) of the Company as at 31 March 2018, and it’s the Statement of Profit and Loss (Financial Performance including Other Comprehensive Income), its Cash Flows and the Changes in Equity for the year ended on that date.

Matter of Emphasis

1. We draw attention to Note No. 33 of the accompanying Standalone Financial Statements in respect of Winding up petitions and recovery cases against the Company.

2. We draw attention to Note No. 34 of the accompanying Standalone Financial Statements, in respect of non- provision of long disputed advances/claims/liability against the Company, on account of the reasons for recovery/realization/settlement as stated in said notes.

3. We draw attention to Note No. 35(h) of the accompanying Standalone Financial Statements in respect of treatment in the books of accounts of the assignment / settlement of Debts of various Banks and the financial institutions.

4. We draw attention to Note No. 35(l) of the accompanying Standalone Financial Statements, in respect of a Charge sheet filed by the Central Bureau of Investigation (CBI) against the Company and its few Directors.

5. We draw attention to Note No. 39(b) of the accompanying Standalone Financial Statements in respect of third party balance confirmations, its classification in respect of nature of realization of the amount and provision thereof.

Other Matter

The Comparative financial information of the Company for the year ended 31st March 2017 included in the statement, is based on the previously issued statutory Financial Statements for the year ended 31st March 2017 were audited by the predecessor auditor vide their audit report dated 23rd May 2017. The Adjustment to those Financial Statements for the difference in accounting principles adopted by the Company on transition to IND AS have been audited by us.

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 subsection (11) of section 143 of the Act, we give in the Annexure A statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable for the year under consideration.

2. As required by Section 143 (3) of the Act, we broadly 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 with reference to these standalone Financial Statements and the operating effectiveness of such controls, refer to our separate report in Annexure B;

(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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements-Refer Note No. 30,34 and 35(k) to the Standalone Financial Statements;

(ii) There are no long term contracts including derivative contracts and accordingly no provision is required to be made for any loss from the same;

(iii) There is no fund which is pending to be transferred to the Investor Education and Protection Fund by the Company.

(iv) The disclosure requirements relating to holdings as well as dealings in the specified bank notes were applicable for the period from 8th November 2016 to 30th December 2016 which are not relevant to these Standalone Financial Statements. Hence, reporting under clause is not applicable.

The Annexure A referred to in Independent Auditor’s Report to the members of Electrotherm (India) Limited on the Standalone Financial Statements for the year ended on March 31, 2018, we report that:

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

the Company is in the process of updating the fixed assets register in certain respect.

(b) As informed to us, the Company has a programme of physical verification of its fixed assets by which the fixed assets are verified by the Management at periodic manner. In accordance with this programme fixed assets of Engineering Division were verified during the year and as informed to us, 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 explanation given to us the title deeds of immovable properties (which are included under the note 3- ‘Property, plant and equipment’), are held in the name of the Company.

ii. The physical verification of inventory has been conducted at reasonable intervals by the Management during the year, except for goods-in-transit. As informed to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts.

iii. The Company has granted loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’)

(a) In respect of the aforesaid loans, the terms and conditions on which such loans were granted are not prejudicial to the Company’s Interest.

(b) In respect of the aforesaid loans, the schedule of repayment of principal and Interest has not been stipulated. However, the repayments or receipts are regular.

(c) In respect of the aforesaid loans, there is no amount overdue for more than ninety days.

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 Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

v. In our opinion, and according to the information and explanations given to us, during the year under consideration, the Company has not accepted any deposits within the meaning of sections 73 to 76 of the Act and Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Goods and Service Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues, as applicable, with the appropriate authorities.

There are no undisputed amounts payable in respect of above dues which were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, following are the details of outstanding dues in respect of Income Tax, Goods and Service Tax, Sales Tax, service tax, duty of customs, duty of excise, value added tax or cess etc which have not been deposited/adjusted/reversed on account of any dispute:-

Name Of The Statue	Nature Of Dues	Amount (In Crore Rupees)	Period To Which The Amount Relates	Forum Where Dispute Is Pending
Central Excise Act,1944	Excise Duty	0.004	2005-06	Commissioner, Central Excise, Gandhidham
	Excise Duty	11.65	Dec-05 To Dec-08	CESTAT, Ahmedabad
	Excise Duty	175.00	Apr-05 To Mar-10	CESTAT, Ahmedabad
	Exciseduty (Advance License)	22.41	Mar-11 To Dec-11	Commissioner, Central Excise, Gandhidham
	Excise Duty	68.62	Oct-07 To Sep-12	Commissioner, Central Excise, Gandhidham
	Excise Duty	0.12	Apr-08 To July-11	CESTAT, Ahmedabad
	Excise Duty	0.69	12.04.2006 To 31.12.2006	CESTAT, Ahmedabad
	Excise Duty	2.40	2008-09	CESTAT, Ahmedabad
	Excise Duty	57.38	Apr-09 To Mar-10	Commissioner, Central Excise, Gandhidham
Sub Total		338.27
Finance Act,1994	Service Tax	1.84	Apr-07 To Mar-08	Commissioner, Central Excise, Gandhidham
	Service Tax	0.16	May-07 To Aug-07	CESTAT, Ahmedabad
	Service Tax	0.20	Apr-09 To Aug-10	CESTAT, Ahmedabad
Sub Total		2.20
Customs Act,1962	CVD	7.27	Mar-11 To Dec-11	CESTAT, Ahmedabad
	Interest	6.40	May-07 To Feb-08	CESTAT, Ahmedabad
	Interest	4.74	Jan-08 To May-08	Additional Commissioner, Mundra
	Custom Duty	0.83	Mar-12 To Jan-13	CESTAT, Ahmedabad
	Custom Duty	0.02	Apr-11	Commissioner Of Customs (Preventive), Jamnagar
Sub Total		19.26
Gujarat VAT Act 2005	VAT	10.35	Fy 2010-11	Joint Commissioner,Rajkot
	VAT	6.13	Fy 2013-14	Joint Commissioner,Rajkot
Central Sales Tax Act, 1956	CST	9.65	Fy 2010-11	Joint Commissioner,Rajkot
Sub Total		26.13
Grand Total		385.86

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has defaulted in repayment of loans or borrowings to financial institution and bank as at the balance sheet date. Details of which are as below:-

Name of Lender	Amount of Default as on 31/03/2018* (Rs. in Crores)			Default From
	Principal	Interest	Total
Corporation Bank	116.73	Nil	116.73	April 2012
Central Bank of India	428.94	7.19	436.13	March 2012
Indian Overseas Bank	200.00	0.01	200.01	August 2011
Syndicate Bank	24.45	9.50	33.95	October 2011
Standard Chartered Bank	8.41	Nil	8.41	December 2011
International Finance Corporation	143.75	14.01	157.76	June 2011

* The above table does not include the interest which bank has not provided after the account has been Classified Non Performing Assets and the amount which has been assigned/settled by the lenders.

ix. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, 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 material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. According to the information and explanation given by the Company, the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the Provisions of section 197 read with Schedule V of the Companies Act 2013.

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

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-24, Related Party Disclosures.

xiv. According to the information and explanation given to us and on overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence reporting requirements under clause 3(xiv) are not applicable to the Company and not commented upon.

xv. According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

xvi. According to the information and explanations provided to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the paragraph 3(xvi) of the Order is not applicable to the Company.

[ANNEXURE B REFERRED TO IN PARAGRAPH 2 OF REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENT OF OUR REPORT OF EVEN DATE FOR THE YEAR ENDED ON MARCH 31s, 2018]

Report on the Internal Financial Controls under Clause (I) of Sub-Section 3 of Section 143 of the Companies Act, 2013 (“The Act”)

We have audited the internal financial controls over financial reporting of ELECTROTHERM (INDIA) LIMITED (“the Company”) as of March 31, 2018 in conjunction with our audit of the Standalone 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 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, except otherwise stated or reported to the company, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 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, Hitesh Prakash Shah & Co

(Firm Regd.no: 127614W)

Chartered Accountants

Hitesh P Shah

Place : Ahmedabad Proprietor

Date : 25^th May, 2018 Membership No. 124095

---

Mar 31, 2016

INDEPENDENT AUDITOR''S REPORT ON STANDALONE FINANCIAL STATEMENTS

TO

THE MEMBERS OF ELECTROTHERM (INDIA) LTD.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of ELECTROTHERM (INDIA) LTD. ("the Company"), which comprise the Balance Sheet as at March 31, 2016, 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 Standalone Financial Statements

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

Auditor''s Responsibility

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone 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 financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Standalone 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 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 Standalone financial statements.

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

Matter of Emphasis

1. We draw attention to Note No. 2.27 of the accompanying Standalone Financial statements in respect of Winding up petitions and recovery cases against the company, Note No. 2.28 of the accompanying Standalone Financial statements in respect of filing of Reference to BIFR on account of erosion of the net worth of the company and Note No.2.29(f) relating to pending judgment of Hon''ble Supreme Court, all affecting the going concern''s concept of the company.

2. We draw attention to Note No. 2.30 of the accompanying Standalone Financial statements in respect of (a) writing Off of the Old Balances of advances, Trade Receivables and Inventories (b) assignment of Debts of the Some of the Bankers to Edelweiss Asset Reconstruction Company Limited and Invent Assets Securitization & Reconstruction Pvt. Ltd. and direct settlement of debts of ICICI Bank Ltd. and (c) non provision of diminution in the value of Investments in the Subsidiaries, writing off value of investment in Shree Ram Electro cast Limited and other additional disclosures in relation to Standalone Financial statements of the Company.

3. We draw attention to Note No. 2.38 of the accompanying Standalone Financial statements in respect of third party balance confirmations, its classification in respect of nature of realization of the amount and provision thereof.

4. We draw attention to Note No. 2.29(a) to (d) of the accompanying Standalone Financial statements, in respect of non- provision of long disputed advances/claims/liability against the company, on account of the reasons for recovery/realization/settlement as stated in said notes.

Qualification

1. We draw attention Note No 2.29(e) of non- provision of interest on NPA accounts of banks of Rs.683.08 Crore. The exact amounts of the said non provisions are not determined and accounted for by the company.

Opinion

In our opinion and to the best of our information and according to the explanations given to us read with the notes to accounts, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016 and its loss and its cash flows for the year.

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 statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable for the year under consideration.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) With respect to adequacy of the internal financial controls over the financial reporting of the company and the operating effectiveness of such controls refer to our separate report.

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its Standalone financial statements- Refer Note No. 2.31 to the financial statements

ii. there are no long term contracts including derivative contracts and accordingly no provision is required to be made for any loss from the same; and

iii. There is no fund which is pending to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure referred to in Independent Auditor''s report to the members of Electrotherm (India) Limited on the standalone financial statements for the year ended on 31 March, 2016, we report that:

i. (a) The Company has maintained records showing full particulars, including quantitative details and situation of fixed assets, however the company is in the process of updating the fixed assets register in certain respect.

(b) As informed to us, the Company has a programme of physical verification of its fixed assets by which the fixed assets are verified by the Management at regular intervals. In accordance with this programme fixed assets of Steel Division 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 explanation given to us the title deeds of immovable properties, as disclosed in Note 2.09on fixed assets to the Standalone financial statements, are held in the name of the Company.

ii. The physical verification of inventory has been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory (other than old unused inventory which have been written off during the year) as compared to book records were not material and have been appropriately dealt with in the books of accounts.

iii. The Company has granted loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (''the Act'')

(a) In respect of the aforesaid loans, the terms and conditions on which such loans were granted are not prejudicial to the Company''s Interest.

(b) In respect of the aforesaid loans, the schedule of repayment of principal and Interest has not been stipulated, and the parties are repaying the principal amounts, as stipulated, and also regular in payment of Interest as applicable.

(c) In respect of the aforesaid loans, there is no amount overdue for more than ninety days.

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 Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

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

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

Further there are undisputed amounts payable in respect of above dues which were in arrears as at 31^st March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, following are the details of outstanding dues in respect of Income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise , value added tax or cess etc. which have not been deposited/adjusted/reversed on account of any dispute:-

Name of the Statue	Nature of dues	Amount (in Crore Rupees)	Period to which the amount relates	Forum Where Dispute is pending
Central Excise Act,1944	EXCISE DUTY	0.004	12/28/2005	COMMISSIONER ,CENTRAL EXCISE , GANDHIDHAM
	EXCISE DUTY	11.65	DEC-05 TO DEC-08	CESTAT, AHMEDABAD
	EXCISE DUTY	175	APR-05 TO MAR-10	CESTAT, AHMEDABAD
	EDUCATION CESS	0.17	JAN-11 TO MAR-11	CESTAT, AHMEDABAD
	EXCISEDUTY(ADVANCE LICENSE)	22.41	MAR-11 TO DEC-11	COMMISSIONER ,CENTRAL EXCISE , GANDHIDHAM
	SERVICE TAX	1.84	APR-07 TO MAR-08	COMMISSIONER ,CENTRAL EXCISE , GANDHIDHAM
	EXCISE DUTY	68.62	OCT-07 TO SEP-12	COMMISSIONER ,CENTRAL EXCISE ,GANDHIDHAM
	EXCISE DUTY	0.12	APR-08 TO JULY-11	CESTAT, AHMEDABAD
	EXCISE DUTY	0.69	12.04.2006 TO 31.12.2006	CESTAT, AHMEDABAD
	SERVICE TAX	0.16	MAY-07 TO AUG-07	CESTAT, AHMEDABAD
	EXCISE DUTY	2.60	2008-09	CESTAT, AHMEDABAD
	EXCISE DUTY	57.38	APR-09 TO MAR-10	COMMISSIONER ,CENTRAL EXCISE , GANDHIDHAM
SUB TOTAL		340.64
Customs Act,1962	CVD	7.27	MAR-11 TO DEC-11	CESTAT, AHMEDABAD
	INTEREST	6.95	MAY-07 TO FEB-08	CESTAT, AHMEDABAD
	INTEREST	5.26	JAN-08 TO MAY-08	ADDITIONAL COMMISSIONER,MUNDRA
	CUSTOM DUTY	0.83	MAR-12 TO JAN-13	CESTAT, AHMEDABAD
Subtotal		20.31
Income Tax Act,1961	Income Tax	6.38	Assessment Year(2010-11)	(Commssioner of Income Tax)(Appeals)
	Income Tax	25.17	Assessment Year(2011-12)	(Commssioner of Income Tax)(Appeals)
Subtotal		31.55
Gujarat VAT Act 2005	VAT	31.84	Financial Year(2009-10) &(2010-11)	Joint Commissioner Mumbai (Mazgeon)
	VAT	17.7	Financial Year(2010-11)	Joint Commissioner Rajkot
Central Sales Tax Act,1956	CST	9.65	Financial Year(2010-11)	Joint Commissioner Rajkot
Subtotal		59.19

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has defaulted in repayment of loans or borrowings to financial institution and bank as at the balance sheet date. Details of which are as below:

Name of Lender	Amount of Default as on 31/03/2016* (Rs. in Crores)			Default From
	Principal	Interest	Total
Dena Bank	51.44	0.00	51.44	September 2011
Corporation Bank	116.71	0.00	116.71	April 2012
Union Bank of India	49.40	0.00	49.40	April 2012
Standard Chartered Bank	15.31	0.00	15.31	December 2011
Central Bank of India	429.07	7.06	436.13	March 2012
Indian Overseas Bank	200.00	0.01	200.01	August 2011
Vijaya Bank	59.94	19.66	79.59	March 2012
Syndicate Bank	24.45	9.94	34.39	October 2011
UCO Bank	32.01	0.00	32.01	June 2011
International Financial Corporation	152.38	5.39	157.76	June 2011

*The above table does not include the interest which bank has not provided after the account has been classified Non Performing Assets and the amount which has been assigned/settled by the Banker.

ix. The company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, 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 material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. Since the Company has not paid/ provided for managerial remuneration during the year the provisions of Clause 3(xi) of the Order are not applicable to the Company.

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

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 accounting standards.

xiv. The Company has made preferential allotment of shares during the year under review and the requirement of Section 42 has been complied with. The shares have been issued as part of arrangement of assignment of debts to an Asset reconstruction company and accordingly no amount has been raised out of such issue of shares.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the paragraph 3(xvi) of the Order is not applicable to the Company.

FOR MEHTA LODHA & CO.

(FIRM REGD. NO.: 106250W)

CHARTERED ACCOUNTANTS

PRAKASH D.SHAH

Place : Ahmedabad Partner

Date : 30^th May, 2016 Membership No. 34363

---

Mar 31, 2015

We have audited the accompanying Standalone financial statements of Electrotherm (India) Limited('the Company'), which comprises the balance sheet as at 31st March 2015, the Statement of Profit and Loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

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

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

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

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

Matter of Emphasis and Qualification

1. We draw attention to Note No. 2.27 of the accompanying Standalone Financial statements in respect of Winding up petitions and recovery cases against the company, Note No. 2.28 of the accompanying Standalone Financial statements in respect of filing of Reference to BIFR on account of erosion of the net worth of the company and Note No.2.30 relating to pending judgment of Hon'ble Supreme Court, all affecting the going concern's concept of the company.

2. We draw attention to Note No. 2.29(a) to (d) of the accompanying Standalone Financial statements, in respect of non- provision of long disputed advances/claims/liability against the company, on account of the reasons for recovery/realization/settlement as stated in said notes, and the Note No 2.29(f) of non- provision of interest on NPA accounts of banks of Rs. 933.01 Crore. The exact amounts of the said non provisions are not determined and accounted for by the company.

3. We draw attention to Note No. 2.31 of the accompanying Standalone Financial statements in respect (a) writing Off of the Old Balances of advances, Trade Receivables and Inventories (b) assignment of Debts of the Some of the Bankers to Edelweiss Asset Reconstruction Company Limited and (c) non provision of diminution in the value of Investments in the Subsidiaries and other additional disclosures in relation to Standalone Financial statements of the Company.

4. We draw attention to Note No. 2.39 of the accompanying Standalone Financial statements in respect of third party balance confirmations, its classification in respect of nature of realization of the amount and provision thereof.

5. We draw attention toNote No. 1 of Note No. 2.09 of the accompanying Standalone Financial statements in respect of change in the method of depreciation on account of introduction of Schedule II of the Companies Act, 2013.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, read with the points stated in the Emphasis of Matter and Qualification, the Standalone Financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

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

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

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

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 143 (3) of the Act, we broadly 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 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, read with Note No 2.31(e) of the notes to Accounts relating to accounting of Deferred Tax Liability/Asset, comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

(f) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) the Company has disclosed the impact of pending litigations on its Financial position in its Standalone financial statements, to the extent possible. However attention is drawn on Note no. 2.27 to 2.30, 2.32 and 2.31 (n) to the standalone financial statements;

(ii) there are no long term contracts including derivative contracts and accordingly no provision is required to be made for any loss from the same; and

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended on March 31,2015..

[ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF ELECTROTHERM (INDIA) LIMITED, FOR THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31stMARCH 2015]

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

(b) The Company has a programme of physical verification of its fixed assets by which fixed assets are verified at regular intervals. In accordance with this programme 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.

(ii) (a) As informed to us, the inventory has been physically verified by the management during the year except goods in transit, material with third parties and old inventories. In our opinion, the frequency of such physical verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories (other than old unused inventory which have been written off during the year), were not material, and have been properly dealt with in the books of accounts.

(iii) As informed to us, the Company has granted loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act'). The rate of interest and the terms of repayment are not stipulated and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted deposits from the public (other than exempted public deposits) and accordingly paragraph 3 (v) of the Order is not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost records under sub section (1) of section 148 of the Companies Act and are of the opinion that prima- facie, the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of the same.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company is regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with the appropriate authorities though there is slight delay in a few cases.

Further no undisputed amounts payable in respect of above dues were in arrears as at 31st March 2015 for a period of more than six months from the date they became payable.

(b) On the basis of information furnished to us, following are the details of outstanding dues in respect of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax or cess, which have not been deposited / adjusted / reversed on account of any dispute:-

Amount Name of the Statute Nature of dues (in Crore Period to which the Rupees) amount relates

EXCISE DUTY 12.23 APR-09 TO MAR-10

EXCISE DUTY 0.004 28-12-2005

EXCISE DUTY 16.65 DEC-05 TO DEC-08

EDUCATION CESS 0.41 JAN-09 TO JAN-10

EXCISE DUTY 175.00 APR-05 TO MAR-10

EDUCATION CESS 0.17 JAN-11 TO MAR-11

Central Excise Act,1944 1 EXCISE DUTY (ADVANCE 22.41 MAR-11 TO DEC-11 LICENCE)

SERVICE TAX 1.84 APR-07 TO MAR-08

EXCISE DUTY 68.62 OCT-07 TO SEPT-12

EXCISE DUTY 0.12 APR-08 TO JULY-11



SERVICE TAX 3.57 2009-10 TO 2013-14

Sub Total 301.02

CVD 7.27 MAR-11 TO DEC-11

INTEREST 6.95 MAY-07 TO FEB-08

Customs Act,1962

INTEREST 5.26 JAN-08 TO MAY-08

CUSTOM DUTY 0.83 MAR-12 TO JAN-13

Sub Total 20.31

Income Tax 6.38 Assessment Year (2010-2011) Income Tax Act, 1961

Income Tax 25.17 Assessment Year (2011-2012)

Sub Total 31.55

VAT 17.94 Assessment Year (2009-2010)& (2010-2011)

VAT 20.95 Assessment Year (2010-2011) Central Sales Tax Act, CST 1956 11.15 Assessment Year (2010-2011)

Sub Total 50.04

Grand Total 402.92

Name of the Statute Nature of dues Forum Where Dispute is pending

ASST. COMMISSIONER, GANDHIDHAM EXCISE DUTY (MATTER WAS REMANDED BY CESTAT, AHMEDABAD)

EXCISE DUTY COMMISSIONER, CENTRAL EXCISE, RAJKOT

EXCISE DUTY CESTAT, AHMEDABAD

EDUCATION CESS CESTAT, AHMEDABAD

EXCISE DUTY CESTAT, AHMEDABAD

EDUCATION CESS CESTAT, AHMEDABAD

Central Excise Act,1944 1 EXCISE DUTY (ADVANCE COMMISSIONER, CENTRAL EXCISE, LICENCE) RAJKOT

SERVICE TAX COMMISSIONER, CENTRAL EXCISE, RAJKOT

EXCISE DUTY COMMISSIONER, CENTRAL EXCISE, RAJKOT

EXCISE DUTY CESTAT, AHMEDABAD

COMMISSIONER, CENTRAL EXCISE, SERVICE TAX GANDHIDHAM,KUTCH

Sub Total CVD CESTAT, AHMEDABAD

INTEREST CESTAT, AHMEDABAD

Customs Act,1962

INTEREST ADDITIONAL COMMISSIONER, MUNDRA

CUSTOM DUTY CESTAT, AHMEDABAD

Sub Total

Income Tax (Commissioner of Income Tax) (Appeals)

Income Tax Act, 1961

Income Tax (Commissioner of Income Tax) (Appeals)

Sub Total

VAT Joint Commissioner, Mumbai (Mazgaon)

VAT Joint Commissioner, Rajkot

Central Sales Tax Act, CST 1956 Joint Commissioner, Rajkot

(c) The amount required to be transferred to investor education and protection fund has been transferred within time in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under.

(viii) The Company has accumulated losses at the end of the reporting period and the said accumulated losses at the end of the year has exceeded fifty percent of the net worth of the company and it has cash losses in the current year and also in the immediately preceding financial period.

(ix) Based on our audit procedures and on the information and explanations given by the management we are of the opinion that the company has defaulted in repayment of dues to financial institution and Banks of Rs.1768.87 Crore (other than debts assigned by State Bank of India, Bank of India, Bank of Baroda, Canara Bank, State Bank of Travancore to Edelweiss Asset Reconstruction Company Ltd), from 2011.The said defaulted amounts does not include the amount of interest not provided by the company of Rs. 933.01 Crore on the NPA accounts.

(x) The company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) During the year under consideration, the company has not taken term loans.

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

FOR MEHTA LODHA & CO. (FIRM REGD. NO.: 106250W) CHARTERED ACCOUNTANTS

PRAKASH D.SHAH Place : Ahmedabad Partner Date : 26th May, 2015 Membership No. 34363

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Mar 31, 2014

We have audited the accompanying financial statements of Electrotherm (India) 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 six months period ended on 31st March 2014, 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 accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956, read with the General Circular 8/2014 dated April 4 2014 issued by the Ministry of Corporate Affairs. 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 the 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

(b) in the case of the Statement of Profit and Loss, of the loss for the 6 months period ended on that date; and

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

Emphasis of Matter and Qualification

1. We draw attention to Note No. 2.27 of the accompanying financial statement in respect of Winding up petition and recovery cases against the company, Note No. 2.28 of the accompanying financial statement in respect of restructuring of the debts of the company and filing of Reference to BIFR and Note No.2.30 relating to pending judgment of Hon''ble Supreme Court, all affecting the going concern''s concept of the company.

2. We draw attention to Note No. 2.29 of the accompanying financial statement in respect of non provision of long disputed advances and claims/liability against the company and on account of the reasons for recovery/realization/non provision as stated in said notes, the exact amount of the said non provisions are not determined and accounted for by the company.

3. We draw attention to Note No. 2.31 of the accompanying financial statement in respect of additional disclosures in relation to financial statements of the Company.

4. We draw attention to Note No. 2.39 of the accompanying financial statement in respect of third party balance confirmation and its classification, non provision of interest on NPA accounts of banks of Rs. 698.66 Crore, erosion of net worth of the company, indication of impairment of Capital Work in Progress, doubtful trade receivables, obsolete old stocks and other issues and the balance amount of the same is not exactly quantified for the reporting aspect.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) in our opinion, the balance sheet, statement of profit and loss, and cash flow statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; ("the Act") read with the General Circular 8/2014 dated April 4 2014 issued by the Ministry of Corporate Affairs.

(e) On the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

[ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF ELECTROTHERM (INDIA) LIMITED, FOR THE SIX MONTHS PERIOD ENDED ON 31st MARCH, 2014.]

(1) (a) We have been informed that, the company is in process of updating the records showing particulars of quantity and situation of fixed assets.

(b) As informed to us, the company has formulated a programme of physical verification of all the fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Accordingly, the physical verification has been carried out by the management during the period of the fixed assets at Palodia plant and as informed to us, no material discrepancies were noticed on such physical verification. In our opinion, the fixed assets of other Plants are required to be physically verified and to be reconciled with the records.

(c) None of the substantial part of fixed assets has been disposed off during the period.

(2) (a) As informed to us, during the period the management has conducted physical verification of the inventories and in our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are broadly reasonable and adequate having regard to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventory. As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(3) (a) As informed to us, the company has taken unsecured loan from the Companies, Firms and other parties (except foreign associates) listed in the register maintained under section 301 of the Companies Act, 1956. The aggregate of loan outstanding from seven such parties as on the last day of the period is Rs. 5.36 Crore. The rate of interest and the terms of repayment are not stipulated and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(b) As informed to us, the company has given loans to the Companies, Firms and other parties (except foreign associates) listed in the register maintained under section 301 of the Companies Act. The aggregate of loan outstanding of three such parties as on the last day of the period is Rs. 10.21 Crore. The rate of interest and the terms of repayment are not stipulated and other terms and conditions 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 generally adequate internal control procedures commensurate with the size of the company and the nature of its business with regards to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that transactions that need to be entered into the register maintained under section 301 of the Companies Act 1956, have been so entered.

(b) According to the explanations given to us, the transaction of purchase of goods materials and service and sale of goods, materials and service made in pursuance of contracts agreements entered in the register maintained under section 301 of the companies Act, 1956 and aggregating Rs. five lakhs or more in respect of each party are reasonable having regard to the prevailing market prices for such goods or services or prices at which transactions for similar goods or services have been entered with other parties except where comparable quotations are not available having regard to the specialized nature of the materials purchased by the company.

(6) In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public as per the directives issued by the Reserve Bank of India and the provisions of section 58A, section 58AA and any other relevant provisions of the Act and the rules framed there under.

(7) The Company has an Internal Audit Department system; however, the same is required to be further strengthened with regard to the scope, reporting and its compliance so that it can be commensurate with size and nature of business of the company.

(8) The Central Government of India has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the Products of the Company and on the basis of the explanation given and our broad review of the records maintained, prima facie the company has maintained cost records for the said Products. The contents of these accounts and records have not been examined by us.

(9) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Customs Duty, Excise Duty and cess were in arrears as at 31st March, 2014 for a period of more than six months from the date they become payable.

(c) On the basis of information furnished to us, following are the details of outstanding dues in respect of Sales Tax, Income Tax, Custom Duty, Wealth Taxes, Excise Duty and Cess which have not been deposited on account of any dispute:-

NAME OF THE FORUM WHERE DISPUTE IS PENDING AMOUNT (Rs. STATUTORY DUES In Crore)

Excise Duty Customs Excise and Service Tax 175.58 Appellate Tribunal

Excise Duty Dy. Commissioner/Commissioner of 121.93 Excise and Custom

Excise Duty Directorate General Of Central 1.30 Excise Intelligence -Ahmedabad

Custom Duty Dy. Commissioner/Commissioner of 13.78 Customs

Custom Duty The Additional Director General, 7.27 Directorate of Revenue Intelligence, Zonal Unit, Ahmedabad

VAT Joint Commissioner (Rajkot) 5.94

VAT Joint Commissioner (Mazgaon, Mumbai) 17.94

Income Tax Commissioner of Income Tax (Appeals) 25.17

(10) The accumulated losses at the end of the reporting period have exceeded fifty percent of the net worth of the company and it has incurred cash losses in current period and in the immediately preceding financial year.

(11) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has defaulted in repayment of dues (including interest) to financial institution and banks and as informed to us, details relating to extent of defaults is not readily available with the company and therefore its relevant details cannot be reported.

(12) We are of the opinion, that the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society and therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(14) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(15) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

(16) According to the Cash Flow Statement and other records examined by us as well as information and explanations given to us, during the period under consideration no new term loan has been taken by the company.

(17) According to the Cash Flow Statement and other records examined by us as well as information and explanations given to us on an overall basis, we report that funds raised on short term basis have not prima-facie been used for long term investment.

(18) The Company has not made preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(19) The company has not issued any debentures and accordingly, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(20) During the period, the company has not raised any money through a public issue and accordingly the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

(21) During the course of our examination of the books and records of the company, carried out in accordance with generally accepted practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the period, nor have we been informed of such case by the management.

For Mehta Lodha & Co. (Registration No.106250W) Chartered Accountants

Prakash D.Shah Place : Ahmedabad Partner Date : 27th May, 2014 Membership No. 34363

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Sep 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of ELECTROTHERM (INDIA) LIMITED ("the Company"), which comprise the Balance Sheet as at 30th September 2013, 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 accounting principles generally accepted in India, including the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 ("the Act"), which as per the clarification issued by the Ministry of Corporate Affair continue to apply under section 133 of the Companies Act,2013 (which has suspended section 211(3C) of the Companies Act,1956 w.e.f.12th September 2013). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence 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 broadly 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, read with the points stated in the Emphasis of Matter and Qualification and Notes to accounts of the financial statements, 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 30th September 2013;

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

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

Emphasis of Matter and Qualifications

1. We draw attention to Note No. 2.27 of the accompanying financial statements in respect of winding up petitions filed by the creditors and recovery cases against the company and the Note No. 2.28 of the accompanying financial statements in respect of restructuring of the debts of the company and which may affect the going concern''s concept of the company upon final outcome of the said pending petitions/cases.

2. We draw attention to Note No. 2.29 of the accompanying financial statements in respect of non provision of long disputed advances, doubtful trade receivable, claims/ liability against the company and in absence of full information with the company, the exact amount of the same is not quantified.

3. We draw attention to Note No. 2.39 of the accompanying financial statements in respect of third party balance confirmations, grouping & classification, Disclosure of Gross Amounts, non provision of interest on NPA accounts of banks, indication of impairment of assets and other related issues, resulting into effect on the results/affairs, as given in the said Notes.

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* and read with the 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 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 broadly comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 which as per the clarification issued by the Ministry of Corporate Affair continue to apply under section 133 of the Companies Act,2013(which has suspended section 211(3C) of the Companies Act,1956 w.e.f.12th September 2013);

(e) On the basis of written representations received from the directors as on 30th September 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 30th September 2013, from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

(Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date of Electrotherm (India) Limited)

(1) (a) The company is in process of updating the records showing particulars of quantity and situation of fixed assets.

(b) As informed to us, the company has formulated a program of physical verification of all the fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Accordingly, the physical verification has been carried out by the management during the year of the fixed assets at Palodia plant and as informed to us, no material discrepancies were noticed on such physical verification.

(c) None of the substantial part of fixed assets has been disposed off during the year.

(2) (a) As informed to us, during the year the management has conducted physical verification of the inventories, except of the inventories as stated in Note No. 2.39(e) and further in our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by management is broadly reasonable and adequate having regard to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the company has maintained records of inventory. As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(3) (a) As informed to us, the company has taken unsecured loan from the Companies, firms and other parties (except foreign associates) listed in the register maintained under section 301 of the Companies Act, 1956. The aggregate of loan outstanding from seven such parties as on the last day of the year is Rs. 61.63 Million. The rate of interest and the terms of repayment are not stipulated and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(b) As informed to us, the company has given loans to the companies firms and other parties (except foreign associates) listed in the register maintained under section 301 of the Companies Act, 1956. The aggregate amount of loan outstanding of six such parties is Rs.118.37 Million. The rate of interest and the terms of repayment are not stipulated and other terms and conditions 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 generally adequate internal control procedures commensurate with the size of the company and the nature of its business with regards to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that transactions that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions with parties with whom transactions exceeding value of Rs. 5 Lacs have been entered into during the financial year, are at the prices which are reasonable having regard to the prevailing market prices at the relevant time, except in case of transactions where we are unable to comment owing to the unique and specialized nature of the items and absence of any comparable prices, whether the transactions are made at the prevailing market prices at the relevant time or not.

(6) In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public as per the directives issued by the Reserve Bank of India and the provisions of section 58A, section 58AA and any other relevant provisions of the Act and the rules framed there under.

(7) The Company has an Internal Audit Department system; however, the same is required to be further strengthened with regard to the scope, reporting and its compliance so that it can be commensurate with size and nature of business of the company.

(8) The Central Government of India has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the products manufactured by the company and on the basis of the explanation given and our broad review of the records maintained, prima facie the company has maintained cost records for the said Products. The contents of these accounts and records have not been examined by us.

(9) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it except Central Sales Tax Liability and VAT liability where slight delay in payment has been observed.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Customs Duty, Excise Duty and cess were in arrears as at 30th September, 2013, for a period of more than six months from the date they become payable.

(c) On the basis of information furnished to us, following are the details of outstanding dues in respect of Sales tax, Income tax, Custom duty, Wealth tax, Excise Duty and Cess, which have not been deposited on account of any dispute :

NAME OF THE STATUTORY DUES FORUM WHERE DISPUTE IS PENDING AMOUNT (Rs.In Million)

Excise Duty Customs Excise and Service Tax Appellate Tribunal 1755.80

Excise Duty Dy. Commissioner/Commissioner of Excise and Custom 1224.70

Excise Duty Directorate General Of Central Excise Intelligence 13.01 Ahmedabad

Custom Duty Dy. Commissioner/Commissioner of Customs 190.20

Custom Duty The Additional Director General, Directorate of 72.70 Revenue Intelligence, Zonal Unit, Ahmedabad

Vat Sales Tax Department 179.44

(10) The accumulated losses at the end of the reporting year have exceeded fifty percent of net worth of the company and it has incurred cash losses in current year and in preceding financial period.

(11) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has defaulted in repayment of dues (including interest) to financial institution and banks and as informed to us, details relating to extent of defaults is not readily available with the company.

(12) We are of the opinion that, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society and therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(14) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(15) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(16) According to the Cash Flow Statement and other records examined by us as well as information and explanations given to us, during the year under consideration no new term loan has been taken by the company.

(17) According to the Cash Flow Statement and other records examined by us as well as information and explanations given to us on an overall basis, we report that funds raised on short term basis have not prima facie been used for long term investment.

(18) The Company has not made allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(19) The company has not issued any debentures and accordingly, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(20) During the year, the company has not raised any money through a public issue.

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

For Mehta Lodha & Co.

(Registration No.106250W)

Chartered Accountants

Prakash D.Shah

Date :22nd November, 2013 Partner

Place:Ahmedabad Membership No. 34363

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of ELECTROTHERM (INDIA) LIMITED, as at 31st March, 2011, the Profit & Loss Account and also the Cash flow statement 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) Amended 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 as we considered appropriate and according to the information and explanation given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, for the year under consideration.

4. Further to our comments as stated above in para (3) of this report and subject to notes on account & significant accounting policies, we further broadly report that:-

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

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

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report, read with the notes to accounts and accounting policies, comply with the applicable accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representation received from the Directors of the Company as on March 31st, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31st, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and

(vi) 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:-

(a) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2011;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

ANNEXURE REFERRED TO IN PARAGRAPH (3) OF THE AUDIT REPORT OF EVEN DATE OF THE MEMBERS OF ELECTROTHERM (INDIA) LIMITED, ON THE ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2011.

(1) (a) The company has maintained records showing particulars of quantity and situation of fixed assets.

(b) As informed to us, the company has formulated a programme of physical verification of all the fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by the management during the year and as informed to us, no material discrepancies were noticed on such physical verification.

(c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

(2) (a) As informed to us, during the year the management has conducted physical verification of the inventories (except good in transit and stock lying with third parties) and in our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management is broadly reasonable and adequate having regard to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventory. As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(3) (a) As informed to us, the company has taken unsecured loan from the Companies, firms and other parties listed in the register maintained under section 301 of the Companies Act, 1956. The aggregate of loan outstanding of six such parties as on the last day of the year is Rs. 11.74 Millions. The rate of interest and the terms of repayment are not stipulated and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(b) As informed to us, the company has given loans to the companies firms and other parties listed in the register maintained under section 301 of the Companies Act. In respect of the said loans, the amount outstanding as on the last day of the year is Rs. 120.10 Millions. The rate of interest and the terms of repayment are not stipulated and other terms and conditions 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 generally adequate internal control procedures commensurate with the size of the company and the nature of its business with regards to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that transactions that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions with parties with whom transactions exceeding value of Rs. 5 Lacs have been entered into during the financial year, are at the prices which are reasonable having regard to the prevailing market prices at the relevant time, except in case of transactions where we are unable to comment owing to the unique and specialized nature of the items and absence of any comparable prices, whether the transactions are made at the prevailing market prices at the relevant time or not.

(6) In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public as per the directives issued by the Reserve Bank of India and the provisions of section 58A, section 58AA and any other relevant provisions of the Act and the rules framed there under.

(7) The Company has an Internal Audit Department system; however, the same is required to be further strengthened with regard to the scope, reporting and its compliance so that it can be commensurate with size and nature of business of the company.

(8) The Central Government of India has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the Steel Products and Vehicles and on the basis of the explanation given and our broad review of the records maintained prima facie the company has maintained cost records for the said records for the said Products. The contents of these accounts and records have not been examined by us.

(9) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees; state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Customs Duty, Excise Duty and cess were in arrears as at 31st March, 2011 for a period of more than six months from the date they become payable.

(c) On the basis of information furnished to us, following are the details of outstanding dues in respect of Sales tax, Income tax, Custom duty, Wealth tax, Excise Duty and Cess, which have not been deposited/adjusted/reveresed on account of any dispute. :-

NAME OF THE STATUTORY DUES FORUM WHERE DISPUTE IS PENDING AMOUNT (Rs. In Millions)

Income tax Commissioner of Income-Tax (Appeals) 1.42

Excise Duty Central Excise and Custom Appellate Tribunal 5.40

Excise Duty Commissioner of Central Excise and Custom (Appeals) 910.60

Excise Duty Dy. Commissioner of Excise and Custom 122.30

Excise Duty Commissioner of Central Excise 1750.10

Vat Asst Commissioner of Commercial Tax ( Appeals) 0.61

(10) In our opinion and on the basis of accounts, read with notes to accounts, there are no losses of the Company at the end of financial year and the Company has not incurred cash loss in the current financial year and in preceding financial year.

(11) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues (other than last quarter interest) to financial institution or bank. The company does not have any borrowings by way issue of debentures.

(12) We are of the opinion, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society and therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(14) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(15) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(16) According to the Cash Flow Statement and other records examined by us as well as information and explanations given to us on an overall basis, term loan taken by the company has been utilized for the purpose for which they were raised.

(17) According to the Cash Flow Statement and other records examined by us as well as information and explanations given to us on an overall basis, we report that funds raised on short term basis have not prima-facie been used for long term investment.

(18) The Company has not made allotment of shares to companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956.

(19) The company has not issued any debentures and accordingly, the provisions of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(20) During the year, the company has not raised any money through a public issue.

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

For Mehta Lodha & Co.

(Registration No.106250W)

Chartered Accountants

Prakash D.Shah

Place:Ahmedabad Partner

Date :May 30, 2011 Membership No. 34363

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of ELECTROTHERM (INDIA) LIMITED as at 31st March, 2010, the Profit & Loss Account and also the Cash Flow Statement 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) Amended 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 as we considered appropriate and according to the information and explanation given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, for the year under consideration.

4. Further to our report as stated above in para (3) of this report and subject to notes on account & significant accounting policies, we further broadly report that:- (i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report, read with the notes to accounts and accounting policies, comply with the applicable accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

(vi) 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:- (a) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2010;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

ANNEXURE REFERRED TO IN PARAGRAPH (3) OF THE AUDIT REPORT OF EVEN DATE OF THE MEMBERS OF ELECTROTHERM (INDIA) LIMITED, ON THE ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2010.

(1) (a) The company has maintained records showing particulars of quantity and situation of fixed assets.

(b) As informed to us, the company has formulated a programme of physical verification of all the fixed assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by the management during the year and as informed to us, no material discrepancies were noticed on such physical verification.

(c) None of the substantial part of fixed assets has been disposed off during the year.

(2) (a) As informed to us, during the year the management has conducted physical verification of the inventories and in our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management is reasonable and adequate having regard to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained records of inventory. As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(3) (a) As informed to us, the company has taken unsecured loan from the Companies, firms and other parties listed in the register maintained under section 301 of the Companies Act, 1956, from three parties and aggregating outstanding of ` 22.82 Millions and its terms are not stipulated.

(b) As informed to us, the company has given loans to the companies firms and other parties listed in the register maintained under section 301 of the Companies Act, 1956 to three such parties and aggregating outstanding amount of ` 55.45 Millions and its terms are not stipulated.

(4) In our opinion and according to the information and explanations given to us, there are generally adequate internal control procedures commensurate with the size of the company and the nature of its business with regards to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that transactions that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions with parties with whom transactions exceeding value of ` 5 Lacs have been entered into during the financial year, are at the prices which are reasonable having regard to the prevailing market prices at the relevant time, except in case of transactions where we are unable to comment owing to the unique and specialized nature of the items and absence of any comparable prices, whether the transactions are made at the prevailing market prices at the relevant time or not.

(6) In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public as per the directives issued by the Reserve Bank of India and the provisions of section 58A, section 58AA and any other relevant provisions of the Act and the rules framed there under.

(7) The Company has an Internal Audit Department system; however, the same is required to be further strengthened with regard to the scope, reporting and its compliance so that it can be commensurate with size and nature of business of the company.

(8) The Central Government of India has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the Steel Products and Vehicles and on the basis of the explanation given and our broad review of the records maintained prima facie the company has maintained cost records for the said records for the said Products. The contents of these accounts and records have not been examined by us.

(9) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Customs Duty, Excise Duty and cess were in arrears as at 31st March, 2010 for a period of more than six months from the date they become payable.

(c) On the basis of information furnished to us, following are the details of outstanding dues in respect of Sales tax, Income tax, Custom duty, Wealth tax, Excise Duty and Cess, which have not been deposited on account of any dispute. :-

Name of the Statutory dues Forum where dispute is

pending Amount

(Rs. In Millions)

Income tax Commissioner of

Income-Tax (Appeals) 1.42

(10) In our opinion and on the basis of accounts, read with notes to accounts, there are no losses of the Company at the end of financial year and the Company has not incurred cash loss in the current financial year and in preceding financial year.

(11) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution or bank. The Company does not have any borrowings by way issue of debentures.

(12) We are of the opinion that the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society and therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(14) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(15) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(16) According to the information and explanations given to us, the term loan taken during the year have been broadly applied for the purpose for which the loans were obtained.

(17) According to the Cash Flow Statement and other records examined by us as well as information and explanations given to us on an overall basis, we report that funds raised on short term basis have not prima-facie been used for long term investment.

(18) The Company has not made allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(19) The company has not issued any debentures and accordingly, the provisions of clause 4(xix) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(20) During the year, the company has not raised any money through a public issue.

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

For Mehta Lodha & Co.

(Registration No. 106250W)

Chartered Accountants



Place : Ahmedabad Prakash D. Shah

Date :30th May, 2010 Partner

Membership No.34363