Auditor Report of Sharda Ispat Ltd.

Mar 31, 2024

Sharda Ispat Limited

Report on the Audit of the Financial Statements

Opinion

1. We have audited the accompanying Financial Statements of Sharda Ispat Limited (''the Company''], which comprise the Balance Sheet as at 31st March, 2024, 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 notes to the financial statements including a summary of material accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanation given to us, the aforesaid Financial Statements give the information required by the Companies Act, 2013 (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 (financial position] of the Company as at 31st March, 2024, its profit (financial performance including other comprehensive income], its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit of the Financial statement in accordance with the Standards on Auditing (SAs) specified under section 143(10] of the Companies Act, 2013. Our responsibilities under those Standards are further described in the “Auditor''s Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the audit of financial statement.

Key Audit Matters

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

Key audit matter

How our audit addressed the key audit matter

Related Party Transaction The company has entered into various transactions with the related parties. The transaction includes sale of goods, purchase of goods, receiving services, providing loans to related party. Identification, completeness, compliance with laws and disclosure of transaction with related parties are key audit matters. We have identified the related party transaction as a key audit matter because of risks with respect to completeness of disclosure made in the financial statement, judgment involved in assessing whether transaction entered with the related parties are accounted at arm length price and proper compliance of related party transaction with respect to Companies Act, 2013 and Regulations 23 of SEBI (Listing Obligation and Disclosure Requirements), regulation 2015.

Our audit procedure includes the following 1. We have obtained understanding of Company''s procedures with respect of identifying related parties. 2. We have assessed whether the effective internal control are in place with respect to identifying, authorizing, recording and disclosing related party transaction. 3. We carried out an assessment of compliance with the Companies Act mainly section 177 and section 188. We have also checked the compliance with the SEBI (Listing Obligation and Disclosure Requirements). 4. We have tested on sample basis, related party transactions with the underlying agreement, contracts confirmation letters and other supporting. 5. Obtained an understanding of the Company''s procedures in respect of evaluating arms-length pricing and approval process by the audit committee and the board of directors. 6. We considered the adequacy and appropriateness of the disclosures in the financial statement in accordance with relevant Indian Accounting Standard (Ind AS).

Information other than the Financial Statements and Auditor''s Report thereon

5. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Company''s Annual Report but does not include the financial statements and our auditor''s report thereon.

Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have

performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Financial Statements

6. The Company''s Board of Directors is responsible for the matters stated in Section 134(5] of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Financial Statements that give a true and fair view of the state of affairs (financial position], profit and loss (financial performance including other comprehensive income], changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS] prescribed under Section 133 of the Act read with relevant rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

7. In preparing the financial statements, management is 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.

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

Auditor''s Responsibility for the Audit of the Financial Statements

9. Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

10. 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 the 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

11. 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.

12. 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.

13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period 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

14. As required by the Companies (Auditor''s 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.

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

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

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

(c] The Balance Sheet, the statement of Profit and Loss (including Other Comprehensive Income], the Statement of Changes in equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d] In our opinion, the aforesaid Financial Statements, comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rules issued thereunder;

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

(f] We have also audited the internal financial controls over financial reporting of the Company as on 31 March 2024 in conjunction with our audit of the financial statements of the Company for the year ended on that date and our report as per “Annexure B” expressed an unmodified opinion;

(g] With respect to the other matters to be included in the Auditor''s Report in accordance with Rule11 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 as on March 31, 2024 on its financial position in the financial statements. (Refer Note 33 to the financial statements on Contingent Liabilities]

ii. The company did not have any material foreseeable losses on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2024.

iv. (a] The management has represented that, to the best of its knowledge and belief, 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 persons or entities, 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 to or on behalf of the Ultimate Beneficiaries.

(b] The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, 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 Parties (“Ultimate Beneficiaries”] or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures that were 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] contain any material misstatement.

v. During the year under review, the Company has not paid any dividend and hence Section 123 of the Act is not applicable to the Company.

vi. In our opinion, the managerial remuneration for the year ended March 31, 2024 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

vii. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recoding audit trail (edit log] facility and the same has operated through 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.

As proviso to Rule 3(1] of the Companies (Accounts] Rules, 2014 is applicable from the period April 1, 2023 reporting under Rule 11(g] of the Companies Act (Audit and Auditors] Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ending March 31, 2024.

For Panpaliya Taori& Co.

Chartered Accountants

UDIN-24115665BKCTAF9083 ^{Ritesh Panpaliya}

Partner (M.No.115665)

Firms Reg. No. 125508W

Nagpur, dated

21st May, 2024.

---

Mar 31, 2023

1. We have audited the accompanying IND AS Financial Statements of Sharda Ispat Limited (''the Company''], which comprise the Balance Sheet as at 31st March, 2023, 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 notes to the financial statements including a summary of significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanation given to us, the aforesaid IND AS Financial Statements give the information required by the Companies Act, 2013 (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 (financial position] of the Company as at 31st March, 2023, its profit (financial performance including other comprehensive income], its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit of the IND AS Financial statement in accordance with the Standards on Auditing (SAs) specified under section 143(10] of the Companies Act, 2013. Our responsibilities under those Standards are further described in the “Auditor''s Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the audit of IND AS Financial statement.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the IND AS financial statements for the financial year ended March 31,2023. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report:

Key audit matter

How our audit addressed the key audit matter

Related Party Transaction The company has entered into various transactions with the related parties. The transaction includes sale of goods, purchase of goods, receiving services, providing loans to related party. Identification, completeness, compliance with laws and disclosure of transaction with related parties are key audit matters. We have identified the related party transaction as a key audit matter because of risks with respect to completeness of disclosure made in the financial statement, judgment involved in assessing whether transaction entered with the related parties are accounted at arm length price and proper compliance of related party transaction with respect to Companies Act, 2013 and Regulations 23 of SEBI (Listing Obligation and Disclosure Requirements), regulation 2015.

Our audit procedure includes the following 1. We have obtained understanding of Companies procedures with respect of identifying related parties. 2. We have assessed whether the effective internal control are in place with respect to identifying, authorizing, recording and disclosing related party transaction. 3. We carried out an assessment of compliance with the Companies Act mainly section 177 and section 188. We have also checked the compliance with the SEBI (Listing Obligation and Disclosure Requirements). 4. We have tested on sample basis, related party transactions with the underlying agreement, contracts confirmation letters and other supporting. 5. Obtained an understanding of the Company''s procedures in respect of evaluating arms-length pricing and approval process by the audit committee and the board of directors. 6. We considered the adequacy and appropriateness of the disclosures in the financial statement in accordance with relevant Indian Accounting Standard (Ind AS).

6. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Company''s Annual Report but does not include the IND AS financial statements and our auditor''s report thereon.

Our opinion on the IND AS 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 IND AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the IND AS Financial Statements

7. 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 IND AS Financial Statements that give a true and fair view of the state of affairs (financial position], profit and loss (financial performance including other comprehensive income], changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS] prescribed under Section 133 of the Act read with relevant rules issued thereunder. 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 IND AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the IND AS financial statements, management is 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.

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

10. Our objectives are to obtain reasonable assurance about whether the IND AS 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 IND AS financial statements.

11. 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 the IND AS 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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 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 IND AS financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12. 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 i n internal control that we identify during our audit.

13. 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.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the IND AS financial statements of the current period 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

15. As required by the Companies (Auditor''s 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 “AnnexureA”, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

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

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

(c) The Balance Sheet, the statement of Profit and Loss (including Other Comprehensive Income], the Statement of Changes in equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid IND AS Financial Statements, comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rules issued thereunder;

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

(f) We have also audited the internal financial controls over financial reporting of the Company as on 31 March 2023 in conjunction with our audit of the financial statements of the Company for the year ended on that date and our report as per “Annexure B” expressed an unmodified opinion;

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule11 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 as on March 31, 2023 on its financial position in the IND AS financial statements. (Refer Note 34 to the IND AS financial statements on Contingent Liabilities]

ii. The company did not have any material foreseeable losses on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2023.

iv. (a] The management has represented that, to the best of its knowledge and belief, 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 persons or entities, 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 to or on behalf of the Ultimate Beneficiaries.

(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, 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 Parties (“Ultimate Beneficiaries”] or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures that were 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] contain any material misstatement.

v. During the year under review, the Company has not paid any dividend and hence Section 123 of the Act is not applicable to the Company.

vi. In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

vii. Proviso to Rule 3(1] of the Companies (Accounts) Rules, 2014 (as amended) which provides for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company only with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For Panpaliya Taori& Co.

Chartered Accountants

UDIN-23115665BGVPGA8315 ^{Ritesh Panpaliya}

Partner (M.No.115665)

Firms Reg. No. 125508W

Nagpur, dated

29th May, 2023.

---

Mar 31, 2014

1. We have audited the accompanying financial statements of Sharda Ispat Ltd., Nagpur, which comprise the Balance Sheet as at 31H March, 2014, the statement of Profit & 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 forthe Financial Statements:

2. Management is responsible forthe preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow of the company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 of the Ministry of Corporate Affairs in respect of section133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

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

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

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

Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, the 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.

i) in the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2014,

ii) in the case of the statement of Profit & Loss, of the Profit for the year ended on that date, and,

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

Emphasis of Matter:

7. We draw attention to the transactions covered under section 297 of Companies Act, 1956, the previous sanction of central government under section 297 of the companies act, 1956 was not made available.

Report on Other Legal and Regulatory Requirements:

8. 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 paragraph 4 & 5 of the order.

9. 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 and the Statement of Profit & Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet and the Statement of Profit & Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 read with General Circular 15/2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013, and

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

SHARDA ISPAT LTD.

(Referred to our Report of Even date)

On the Accounts as at 31st March. 2014

i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except for additions of the current year.

(b) All the Assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been noticed on such verification, as reported to us.

(c) In our opinion and according to the information and explanations given to us, there is no disposal of fixed assets by the company during the year

ii) (a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

{c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

iii) (a) The Company has notgranted any loans, secured or unsecured to companies, firms or other parties covered in the register under section 301 of the Act. The provisions of (iii) (b) & (d) of paragraph 4 of the order are not applicable to the company.

(b) The Company has taken unsecured loans from Companies, Firms or other parties covered in the register maintained u/s. 301 of the Companies Act, 1956. The amount of Rs. 327.70 Lacs from five parties have been taken during the financial year.

(c) The rate of interest and other terms and conditions of such unsecured loan taken by the company are, in our opinion, prima facie not prejudicial to the interest of the Company.

(d) The payment of the principal amount and interest are regular.

iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither came across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us and as per the records of the company, the transactions of sales of goods, materials and services aggregating during the year exceeding Rs. 5 Lacs in value with each party as in the register in pursuance of section 301 of the Companies Act, 1956, which are of propritary in nature and for which comparable market prices are not available and accordingly we are unable to comment on the reasonableness or otherwise of such transaction.

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

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

viii) According to the information & explanations given to us, the cost records under Section 209(1 )(d) of the Companies Act, 1956 read with the Companies (Cost Accounting Records) Rules, 2011 have been maintained but we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) (a) According to the information and explanations given to us & records of the company examined by us, in our opinion, the company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty and any other statutory dues which remained outstanding as at 31st March, 2014 fora 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, the following dues of Sales Tax and Excise duty as at 31st March, 2014, have not been deposited on account of disputes, are as under

Sr Name of Statute Nature of Amount Nature of Dues No. Dues (Rs) Dispute is pending 1. Central Excise Excise 1,257,012 High Court Delhi Act Duty 2. Central Excise Penalty 224,000 Commissioner of Act Central Excise, Indore

3. Central Excise Excise Duty 1,760,778 CEGAT, Mumbai Act & Penalty (Appeals), Nagpur

4. Central Excise Excise Duty 2,264,530 Add.Commissioner Act & Penalty of Central Excise, Customand Service Tax, Nagpur

5. Central Excise Excise Duty 1,963,762 Jt. Commissioner Act & Penalty of Central Excise, Custom and Service Tax, Nagpur

6. Central Excise Excise Duty 374,578 Dy. Commissioner Act & Penalty Central Excise, Division I, Nagpur

7. Central Excise Service Tax 115,559 Dy.Commissioner Act Service Tax Cell, Nagpur

8. Bombay Sales Tax Sates Tax, 1,308,650 Joint Commissioner Act(1999-00) In terest of Sales Tax and Penalty (Apparels). Nagpur

9. Central Sales Sales Tax, 237,211 Joint Commissioner Tax Act (1999-00) Interest and of Sales Tax Penalty (Appeals),Nagpur

10. Bombay Sales Tax Sales Tax, 12,162,805 Joint Commissioner Act (2000-01) Interest of Sales Tax and Penalty (Appeals),Nagpur

11. Central Sales Tax Sales Tax, 3,015,700 Joint Commissioner Act (2000-01) Interest of Sales Tax and Penalty (Appeals),Nagpur

(Above Sr.No. 8, 9, 10 and 11 are in total. The allocation shall be made after final decision between demerged company and resultant companies) (Refer Note No. 28.2)

x) As per Records of the company, the accumulated losses at the end of the financial year are less than 50% of its net worth. The company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in the repayments of dues to bank.

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/ mutual benefit fund/society are not applicable to the company.

xiv) According to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

xvi) As per records examined by us, the company has not received any term loan during the year.

xvii) According to the information and explanation given to us, and the records of the company examined by us and on an overall basis, we report that short term fund have not been used for long term investment during the year.

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

xix) The company has not issued any debentures during the year.

xx) The company has not raised any money by public issue during the year.

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

FOR LOYABAGRI & CO., Firm Registration No 105658W Chartered Accountants,

Nagpur, Dated the, (GOPAL DAS BAGRI) 30th May, 2014 Partner (M.No.002933)

---

Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of Sharda Ispat Ltd., Nagpur, which comprise the Balance Sheet as at 31st March, 2013, the statement of Profit & Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

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

Auditor''s Responsibility:

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

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

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

Opinion:

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

i) in the case of the balance sheet, of the state of affairs of the Company as at 31s'' March, 2013,

ii] in the case of the statement of Profit & Loss ,of the Profit for the year ended on that date, and,

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

Emphasis of Matter:

We draw attention to the transactions covered under section 297 of Companies Act, 1956, the previous sanction of central government undersection 297 of the companies act, 1956 was not made available.

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 statementon the matters specified in paragraph 4 & 5 of the order.

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

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

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 and the Statement of Profit & Loss, and the Cash Flow Statement dealt with by th is Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet and the Statement of Profit & Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and

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

i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except for additions of the current year.

(b) All the Assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been noticed on such verification, as reported to us.

(c) In our opinion and according to the information and explanations given to us, there is no disposal of fixed assets by the company during the year

ii) (a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and accordifig to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register under section 301 of the Act. The provisions of (iii) (b) & (d) of paragraph 4 of the order are not applicable to the company.

(b) The Company has taken unsecured loans from Companies, Firms or other parties covered in the register maintained u/s. 301 of the Companies Act, 1956. The amount of Rs. 2.54 Lacs from one party has been taken during the financial year.

(c) The rate of interest and other terms and conditions of such unsecured loan taken by the company are, in our opinion, prima facie not prejudicial to the interest of the Company.

(d) There is no stipulation for repayment of principal loan taken and interest thereon.

iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither came across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us and as per the records of the company, there is no transaction made in pursuance of contracts or arrangements entered in the register in pursuance of section 301 of the Companies Act, 1956 in excess of Rs.5 lacs in respect of any party during the year.

vi) In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of sections 58-A, 58-AAor any other relevant provisions of the Companies Act, 1956 and rules made there under are applicable.

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

viii) According to the information & explanations given to us, the cost records under Section 209(1 )(d) of the Companies Act, 1956 has been maintained but we have not made a detailed examination of the records.

ix)According to the information and explanations given to us & records of the company examined by us, in our opinion, the company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom duty, Excise duty and any other statutory dues which remained outstanding as at 31" March, 2013 for a period of more than six months from the date they became payable.

x) As per Records of the company, the accumulated losses at the end of the financial year are less than 50% of its net worth. The company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in the repayments of dues to bank.

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/ mutual benefit fund/society are not applicable to the company.

xiv) According to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

xvi) As per records examined by us, the company has not received any term loan during the year.

xvii) According to the information and explanation given to us, and the records of the company examined by us and on an overall basis, we report that short term fund have not been used for long term investment during the year.

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

xix) The company has not issued any debentures during the year.

xx) The company has not raised any money by public issue during the year.

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

FOR LOYABAGR1 & CO.,

Firm Registration No 105658W

Chartered Accountants,

Nagpur, Dated the,

(GOPAL DAS BAGRI)

29th May, 2013 Partner

(M.No.002933)

---

Mar 31, 2012

1) We have audited the attached Balance Sheet of Sharda Ispat Ltd., Nagpur, as at 31st March, 2012, the Profit and Loss Account for the year ended on that date annexed thereto and also the Cash Flow Statement for the year ended on that date read with notes annexed hereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates, made by the 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 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 we enclose in the annexure a statement on the matters specified in paragraphs '4' and '5' of the said order.

4) Attention is invited to the transactions covered under section 297 of the Companies Act, 1956, the previous sanction of Central Government under section 297 of the Companies Act was not made available.

5) Subject to our comments in Para 4, above, we report that:

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

(ii) 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.

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

(iv) The Cash Flow Statement, the Profit & Loss Account and the Balance Sheet comply the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956.

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

(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 notes thereon and attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted in India;

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

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

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

ANNEXURE TO AUDITOR'S REPORT OF SHARDA ISPAT LTD.

(Referred to in Paragraph 3 of our Report of Even date on the Accounts as at 31st March, 2012.)

i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except for additions of the current year.

(b) All the Assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been noticed on such verification, as reported to us.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed off by the company during the year.

ii) (a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register under section 301 of the Act. The provisions of (iii) (b) & (d) of paragraph 4 of the order are not applicable to the company.

(b) The Company has taken unsecured loans from Companies, Firms or other parties covered in the register maintained u/s. 301 of The Companies Act, 1956. The amount of Rs. 195.00 Lacs from one party has been taken.

(c) The rate of interest and other terms and conditions of such unsecured loan taken by the company are, in our opinion, prima facie not prejudicial to the interest of the Company.

(d) There is no stipulation for repayment of principal loan taken and interest thereon.

iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither came across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us and as per the records of the company, there is no transactions made in pursuance of contracts or arrangements entered in the register in pursuance of section 301 of the Companies Act, 1956 in excess of Rs. 5 lacs in respect of any party during the year.

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

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

viii) According to the information & explanations given to us, the cost records under Section 209(1 )(d) of the Companies Act, 1956 has been maintained but we have not made a detailed examination of the records.

ix) (a) According to the information and explanations given to us & records of the company examined by us, in our opinion, the company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom duty, Excise duty and any other statutory dues which remained outstanding as at 31st March, 2012 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, the particulars of Sales Tax and Excise duty as at 31st March, 2012, that have not been deposited on account of a dispute pending are as under:

Sr. Name of Statute Nature of Dues Amount Forum where Dispute No. (Rs.) is pending

1. Central Excise Act Excise Duty 12,57,012 High Court, Delhi

2. Central Excise Act Excise Duty 1,40,100 CEGAT.Mumbai & Penalty (Appeals), Nagpur.

3. Central Excise Act Penalty 2,24,000 CEGAT, North Zone, Delhi (Appeals), Nagpur.

4. Central Excise Act Excise Duty 17,61,278 CEGAT, Mumbai & Penalties (Appeals), Nagpur.

5. Central Excise Act Excise Duty 22,64,530 Add. & Penalty Commissioner of Central Excise, Custom and Service Tax, Nagpur

6. Central Excise Act Excise Duty 19,63,762 Jt.Commissioner & Penalty of Central Excise, Custom and Service Tax, Nagpur

7. Central Excise Act Excise Duty 1,87,639 Dep. Commissioner & Penalty Central Excise, Division I, Nagpur

8. Central Excise Act Service Tax 1,15,559 Dep. Commissioner of Service Tax Cell, Nagpur

9. Bombay Sales Tax Act Sales Tax, 13,08,650 Joint (1999-00) Interest Commissioner and Penalty of Sales Tax (Appeals), Nagpur

10. Central Sales Tax Sales Tax, 2,37,211 Joint Act (1999-00) Interest Commissioner and Penalty of Sales Tax (Appeals), Nagpur

11. Bombay Sales Tax Sales Tax, 1,21,62,805 Joint Act (2000-01) Interest Commissioner and Penalty of Sales Tax (Appeals), Nagpur

12. Central Sales Tax Sales Tax, 30,15,700 Joint Act (2000-01) Interest Commissioner and Penalty of Sales Tax (Appeals), Nagpur

(Above Sr. No. 9,10 11 and 12 are in total. The allocation shall be made after final decision between demerged company and resultant companies) (Refer Note No. 29.2)

x) There are accumulated losses of the company at the end of the financial year. The company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in the repayments of dues to bank.

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/society are not applicable to the company.

xiv) According to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

xvi) As per records examined by us, the company has not received any term loan during the year.

xvii) According to the information and explanation given to us, and the records of the company examined by us and on an overall basis, we report that short term fund have not been used for long term investment during the year.

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

xix) The company has not issued any debentures during the year.

xx) The company has not raised any money by public issue during the year.

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



For and on behalf of the Board of Directors

Poonam Sarda Whole-Time Director

N.K. Sarda Chairman & Managing Director

Place: Nagpur Date : 01.08.2012

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Mar 31, 2011

1) We have audited he attached Balance Sheet of Sharda spat Ltd., Nagpur, as at 31st March, 2011, the Profit and Loss Account it for the year ended on the date annexed thereto and also the Cash Flow Statement for the rear ended on that date read with notes annexed hereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express a opinion on these financial statements based on our audit.

2) We conducted out- audit in accordance with auditing standards generally accepted a India. Those standards require that we plan and perform the audit lo obtain reasonable assurance about whether the financial statesmen s are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts t and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates, made by the 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 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 we enclose in the a statement on the matters specified in paragraphs '4' and '5' of the said order.

4) Attention is invited o the transactions covered under section 2 97 of the Companies Act, 1956, the previous sanction of Central Government under Section 297 if the Companies Act was not made available.

5) Subject to our comments in Para 4 above, we report that:-

(i) We have obtain led all the information and explanations, which to the best of oar knowledge and belief were necessary for the purpose of ou] audit.

(ii) In our opinion, proper books of account as required by law, have been Kept by the company so far as appears from our examination o: those books.

(iii) The Balance Sheet, Profit and Loss Account and Cash Fl 3W Statement death with by this report are in agreement with the books of account at.

(iv) The Cash Flow Statement, the Profit & Loss Account and the Balance Sheet :comply the Accounting Standards referred to in Sub Section (30) of Section 211 of the Companies Act, 1956.

(v) On the basis of written representations received from the Directors, as 31st March 2(m &and taken on Board of Directors, we report that none of the Directors is disqualified as on 31- March, 2011 from being appointed as a Director in terns of clause (g) of sub-section (1) of Section 274 of the Company :s Act, 1956.

(vi) In our opinion and to the best of our information and according to the explain ions given to us, the said accounts read together with the does thereon and attached thereto, give the information required by the Companies Act, 1956, in the manner so red aired and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

(b) in the case of the Profit and Loss Account of the profit for the year med on that date.

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

ANNEXURE To AUDITORS' REPORT OF SHARDA ISPAT LTD

Referred to Paragraph 3 of our Report of Even date on 1fhc Accounts as at 31st March. 2011.

i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except for additions of the current year.

(b) All the Ass its have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable hurting regard to the size of :he company and nature of its assets. No material discrepancies have been noticed on such verification, as reported to us

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been) disposed off by the company during the year

ii) (a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinions and according to the information and explanations *even to us, the Company has maintained proper records of inventories arid no material discrepancies were noticed /social verification.

iii) (a) The C0mpany has not granted any loans, secured or 1 unsecured t) companies, firms or other parties covered in the f register under section 301 of the Act. The provisions c f (iii) (b) I & (d) of par agraph 4 of the order are not applicable to the f company.

(b) The Company has taken unsecured loans from Companies, Firms or other parties in the register maintained u/s 301 of the Companies Act, 1956. The amount of Rs.327.50 Lacs from one party has been taken.

(c) The Rate of interest and other terms and conditions of such insecure loan taken by the company are, in our opinion, prima facie not prejudicial; to the interest of the Company.

(d) There is no stipulation for repayment of principal loan taken and interest thereon.

(iv) In our opinion, and according to the information and explanations given to us, there adequate internal control procedures corn menstruate with the size of the company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither came across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v (a) According to the information and explanations that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered

9b) in our opinion and according to the information and explanations given to us and as per the records of the company, there is no transaction made in pursuance of contracts or arrangements entered in the register in pursuance of section 301 of the companies Act, 1956 in excess of Rs.51 lacs in respect of any party during the year.

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

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

viii) The maintained of cost records has not been prescribed by the Central Government under section 209(l)(d) of the Companies Act, 1956, for the products of the company.

ix) (a) According to he information and explanations given to us and records of the company examined by us, in our opinion, the company is regular in depositing with the appropriate authorities undisputed statutory dues including provident Fund, bravest Education and Protection Fund, Employees' State Incurrence, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excite Duty, Cess and any other statutory dues applicable to t. According to the information and explanations given to us, there were no undisputed amounts pa} able in respect Provident Fund, Investor Education and Protection Fund, Enfold fees' State Insurance, Income Tax, Saabs Tax, Wealth Tax, Custom duty, Excise duty and any other statutory dues which remained outstanding as at 31st March, 2011 for a period of move than six months from the date they Decame payable.

(b) According :to the information and explanations given to us and the records of the company examined by us, the particulars of Sales Tax and Excise duty as at 315t March, 2011, that have not been deposited on account Of disputes pending, a e as under :-

Sr. Name of statute Nature of Amount Forum where No Dues (Rs.) Dispute is pending

1. Central Excise Act Excise Duty 12,57,012 High Court Delhi

2 Central Excise .Act Excise Duty 1,40,100 CEGAT, Mumbai & Penalty (Appeal), Nagpur

3 Central Excise Act Penalty 2,24,000 CEGAT, worth Zone, Delhi (Appeals), Nagpur

4 Central Excise Act Excise Duty 23,47,706 CEGAT, Mumbai & Penalty (Appeal), Nagpur

5. Central Excise Act Excise Duty 22,64,530 Add. Commissioner & Penalty of Ceititial excise, custom end service tax, Nagpur

6. Central Excise Act Excise Duty 19,63,762 Jt. Commissioner of & Penalty Central excise, custom end service tax, Nagpur

7 Central Excise Act Service Tax 1,15,559 Dep. Commissioner Service Tax Cell, Nagpur._

8 Bombay Sales Tax Sales Tax, 13,08,650 Joint Commissioner Act (1999-00) Interest and of Sales Tax Penalty (Appeals), Nagpur

9. Central Sales Tax Sales Tax, 2,37,211 Joint Commissioner Act (19991-00) Interest and of Sales Tax Penalty (Appeals) Nagpur

10. Bombay Sales Tax Sales Tax, 1,21,62,805 Joint Commissioner Act (2000-01) Interest and of Sales Tax Penalty (Appeals) Nagpur

11. Central Sales Tax Sales Tax, 30,15,700 Joint Commissioner Act(2000-01) Interest and of Sides Tax Penalty (Appeals), Nagpur

(Above Sr. No 8, 9, 10 and 11 are in total. The allocation Shill be made after final decision between demerged company and resultant companies) (Refer Note No. 9 of Schedule )

x) There are accumulated losses of the company at the end of the financial year. the company has not incurred cash losses urinate current financial 3 ear and in the immediately preceding financial

xi) In our opinion, according to the information and explanations given to us, this company has not defaulted in the repayment s of dues to bank.

xii) The company As to granted any loans or advances on the basis of security by was of p ledge of shares, debentures and other securities.

xiii) The provisions] of any special statute applicable to chit fund/nidhi/ mutual benefit funs /society are not applicable to the company.

xiv) According to [the information and explanations given to us, the company is not dealing in or trading in shares, securities, de dentures and other investments its.

xv) According to the information and explanations given to us, the company has to given any guarantee for loans taken by others from Banks or Financial Institutions.

xvi) As per record examined by us, the company has not received any term loan during the year.

xvii) According to the information and explanation given to us and the records of the company examined by us and on an overall basis, we report that short term fund have not been used for long term investment during :he year.

xviii) The company has not made any' preferential allotment :f shares during the year.

xix) The company has not issued any debentures during the year.

xx) The company has not raised any money by public issue during the year.

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

FOR LOYA BAGRI & CO.

Firm registration No 105658W

Chartered Accountants

Nagpur Dated the, GOPAL DAS BAGRI

29th August, 2011. Partner.(M.No.002933)

LOYA BAGRI & CO

Chartered Accountants Popular Market, Gandhibadh

NAGPUR-440 002.

---

Mar 31, 2010

1) We have audited the attached Balance Sheet of Sharda Ispat Ltd., Nagpur, as at 31st March, 2010, the Profit and Loss Account for the year ended on that date annexed thereto and also the Cash Flow Statement for the year ended on that date read with notes annexed hereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3) As required by the Companies [Auditors Report] Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4) Attention is invited to the transactions covered under section 297 of the Companies Act, 1956, the previous sanction of Central Government under Section 297 of the Companies Act was not made available.

5) Subject to our comments in Para 4 above, we report that:-

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

(ii) 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.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow

Statement dealt with by this report are in agreement with the books of account.

(iv) The Cash Flow Statement, the Profit & Loss Account and the Balance Sheet comply the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956.

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

(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 notes thereon and attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted in India :

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

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

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

ANNEXURE TO AUDITORS REPORT OF SHARDA ISPAT LTD. Referred to in Paragraph 3 of our Report of Even date on the Accounts as at 31st March, 2010.

i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except for additions of the current year.

(b) All the Assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been noticed on such verification, as reported to us.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed off by the company during the year

ii) (a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register under section 301 of the Act. The provisions of (iii) (b) & (d) of paragraph 4 of the order are not applicable to the company.

(b) The Company has taken unsecured loans from Companies,

Firms or other parties covered in the register maintained u/s. 301 of the Companies Act, 1956. The amount of Rs. 310.80 Lacs from one party has been taken.

(c) The rate of interest and other terms and conditions of such unsecured loan taken by the company are, in our opinion, prima facie not prejudicial to the interest of the Company.

(d) There is no stipulation for repayment of principal loan taken and interest thereon.

iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither came across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us and as per the records of the company, there is no transactions made in pursuance of contracts or arrangements entered in the register in pursuance of section 301 of the Companies Act, 1956 and exceeding the value of Rs.5 lacs in respect of any party during the year.

vi) In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of sections 58-A, 58-AA or any other relevant provisions of the Companies Act, 1956 and rules made thereunder are applicable.

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

viii) The maintenance of cost records has not been prescribed by the Central Government under section 209(l)(d) of the Companies Act, 1956, for the products of the company.

ix) (a) According to the information and explanations given to us and records of the company examined by us, in our opinion, the company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom duty, Excise duty and any other statutory dues which remained outstanding as at 31st March, 2010 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, the particulars of Sales Tax and Excise duty as at 31st March, 2010, that have not been deposited on account of disputes pending, are as under :-

Sr. Name of Statute Nature of Amount No. Dues (Rs.)

1. Central Excise Act Excise Duty 12,57,012

2. Central Excise Act Excise Duty 1,40,100 & Penalty

3. Central Excise Act Penalty 2,24,000

4. Central Excise Act Excise Duty 23,47,706 & Penalty

5. Bombay Sales Tax Sales Tax, 13,08,650 Act (1999-00) Interest and Penalty

6. Central Sales Tax Sales Tax, 2,37,211 Act (1999-00) Interest and Penalty

7. Bombay Sales Tax Sales Tax, 1,21,62,805 Act (2000-01) Interest and Penalty

8. Central Sales Tax Sales Tax, 30,15,700 Act (2000-01) Interest and Penalty

Name of Statue Forum where Dispute is pending

Central Excise Act High Court Delhi

Central Excise Act CEGAT, Mumbai (Appeals), Nagpur

Central Excise Act CEGAT, North Zone, Delhi (Appeals), Nagpur

Central Excise Act CEGAT, Mumbai (Appeals), Nagpur

Bombay Sales Tax Act (1999-00) Joint Commissioner of Sales Tax (Appeals), Nagpur

Central Sales Tax Act (1999-00) Joint Commissioner of Sales Tax (Appeals), Nagpur

Bombay Sales Tax Act (2000-01) Joint Commissioner of Sales Tax (Appeals), Nagpur

Central Sales Tax Act (2000-01) Joint Commissioner of Sales Tax (Appeals), Nagpur

(Above Sr. No 5,6,7 and 8 are in total. The allocation shall be made after final decision between demerged company and resultant companies) (Refer Note No. 11 of Schedule R)

x) There are accumulated losses of the company at the end of the financial year. The company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in the repayments of dues to bank or Financial Institutions as the dues of all the Financial Institutions and Banker are settled during the year.

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/ mutual benefit fund/society are not applicable to the company.

xiv) According to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

xvi) As per records examined by us, the company has not received any term loan during the year.

xvii) According to the information and explanation given to us, and the records of the company examined by us and on an overall basis, we report that short term fund have not been used for long term investment during the year.

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

xix) The company has not issued any debentures during the year.

xx) The company has not raised any money by public issue during the year.

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



FOR LOYA BAGRI & CO., Firm registration No 105658W Chartered Accountants,

(GOPAL DAS BAGRI)

Partner. (M.No.002933)

LOYA BAGRI & CO.

Chartered Accountants

Popular Market, Gandhibagh,

NAGPUR-440 002.

Nagpur, Dated the, 24th August, 2010.

---

Mar 31, 2009

1) We have audited the attached Balance Sheet of Sharda Ispat Ltd., Nagpur, as at 31 st March, 2009, the Profit and Loss Account for the year ended on that date annexed thereto and also the Cash Flow Statement for the year ended on that date read with notes annexed hereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3) As required by the Companies [Auditors Report] Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4) Attention is invited to the following:

a) Regarding adjustment of settlement with Financial Institution and effect on Capital Reserve, Secured Loans from Financial Institutions in Balance Sheet and Liability no longer payable under settlement with Banker and Financial Institutions (Net) under "Extra Ordinary Items" in Profit & Loss Account as the no dues certificate from Financial Institution is in process. (Note "11 (i) of Schedule "R")

b) Regarding transactions covered under section 297 of the Companies Act, 1956 the previous sanction of Central Government under Section 297 of the Companies Act was not made available.

5) In our opinion, subject to our comments vide Paragraph 4(a) above, the Cash Flow Statement, the Profit & Loss Account and the Balance Sheet comply the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956.

6) Subject to our comments in Paras 4, above, we report that:

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

(ii) 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.

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

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

(v) 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 notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2009.

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

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

ANNEXURE TO AUDITORSS REPORT OF SHARDAISPAT LTD. (Referred to in Paragraph 3 of our Report of Even date on the Accounts as at 31st March, 2009.) i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets except for additions of the current year.

(b) All the Assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been noticed on such verification, as reported to us.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed off by the company during the year.

ii) (a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register under section 301 of the Act. The provisions of (iii) (b) & (d) of paragraph 4 of the order are not applicable to the company.

(b) The Company has taken unsecured loans from Companies, Firms or other parties covered in the register maintained u / s. 301 of The Companies Act, 1956. The amount of Rs. 98.74 Lacs from one party has been taken.

(c) The rate of interest and other terms and conditions of such unsecured loans taken by the company are, in our opinion, prima facie not prejudicial to the interest of the Company.

(d) There is no stipulation for repayment of principal loans taken and interest thereon.

iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures. v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us and as per the records of the company, there is no transactions made in pursuance of contracts or arrangements entered in the register in pursuance of section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lacs in respect of any party during the year. vi) In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of sections 58-A, 58-AA or any other relevant provisions of the Companies Act, 1956 and rules made thereunder are applicable.

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

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

ix) (a) According to the information and explanations given to us and records of the company examined by us, in our opinion, the company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom duty, Excise duty and any other statutory dues which remained outstanding as at 31 st March, 2009 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, the particulars of Sales Tax and Excise duty as at 31 st March, 2009, that have not been deposited on account of a dispute pending are as under:

Sr. Name of Statute Nature of Dues Amount Forum where Dispute

No. (Rs.) is pending

1. Central Excise Act Excise Duty 12,57,012 High Court, Delhi

2. Central Excise Act Excise Duty 10,55,280 High Court, Delhi

3. Central Excise Act Excise Duty 80,000 Customs, Excise and

Service Tax Appellate Tribunal WZB, Mumbai

4. Central Excise Act Penalty 6,29,933 Custom, Excise, Service Tax Appellate Tribunal, Mumbai.

5. Central Excise Act Excise Duty 1,74,990 CEGAT, Mumbai

& Penalties (Appeals), Nagpur

6. Central Excise Act Excise Duty 2,80,200 Customs, Excise and

& Penalty Service Tax Appellate

Tribunal WZB, Mumbai

7. Central Excise Act Excise Duty 1,87,954 Customs, Excise and Service

Tax Appellate Tribunal WZB, Mumbai

8. Bombay Sales Tax Act Sales Tax, Interest 13,08,650 Dy. Commissioner of Sales and Penalty Tax (Appeals), Nagpur

9. Central Sales Tax Act Sales Tax, Interest 2,37,211 Dy. Commissioner of Sales and Penalty Tax (Appeals), Nagpur

10. Bombay Sales Tax Act Sales Tax 28,515 Joint Commissioner of Sales

Tax (Appeals), Nagpur



x) There is no accumulated losses of the company at the end of the financial year. The company has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in the repayments of dues to bank or Financial Institutions as the dues of all the Financial Institutions and Banker are settled during the year.

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

xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/society are not applicable to the company.

xiv) According to the informationand explanations given to us, the company is not dealing in ortrading in shares, securities, debentures and other investments.

xv)According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

xvi) As per records examined by us, the company has not received any term loan during the year.

xvii) According to thenformation and explanation given to us, and the records of the company examined by us and on an overall basis, we report that short term fund have not been used for long term investment during the year.

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

xix) The company has not issued any debentures during the year.

xx) The company has not raised any money by public issue during the year.

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

For LOYA BAGRI & CO.

Chartered Accountants

(GOPAL DAS BAGRI)

Partner

(M. No. 2933)

Nagpur, Dated the,

17th August, 2009.