Super Forgings & Steels Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2014

We have audited the accompanying financial statements of SUPER FORGINGS & STEELS LTD. which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956 (the "ACT") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the designs, implementation and maintenance of internal controls relevant to the preparation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, 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 the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

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

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

Other Matter

(a) The effect of non-provision of depreciation on Fixed Assets of Dankuni Unit as required by AS-6 on "Depreciation", non-provision of accrued leave liability and provision for Gratuity on management estimates are not based on actuarial valuation as required by AS-15 on "Accounting for Retirement Benefits" and "Impairment of Assets" as required by AS-28 on the profitability of the Company, is not ascertainable.

(b) Depreciation on fixed assets of Dankuni Unit amounting to Rs.547.83 lacs have not been provided in the accounts.

Report on Other Legal and Regulatory Requirements

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

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

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

(b) in our opinion proper books of accounts as required by the law have been kept by the Company so far as appears from our examination of such books and proper returns adequate for the purpose of our audit had been received from its branches.

(c) the reports on the accounts of the Branch, referred to above, audited by the Branch auditor, have been forwarded to us and the same have been considered by us in preparing our report. We have been told by the management, that "Mumbai Branch" has been closed w.e.f. 1st April, 2013.

(d) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt by this Report are in agreement with the books of accounts.

(e) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

(f) the Company has entered into negotiated settlement for redemption of its debentures and are regular in payment of its obligations, therefore, none of the Directors of the Company are disqualified as on March 31,2014, from being appointed as a Director in other Companies in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to Paragraph 3 of our report of even date)

In our opinion and according to the information and explanation given to us, the nature of the Company''s business/ activities during the year are such that clause (xii) of Companies (Auditor''s Report) Order, 2003, are not applicable to the Company. In respect of the other clauses, we report as under :

1. In respect of Company''s fixed assets :

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

(b) The fixed assets except fixed assets of Dankuni unit were physically verified by the management inaccordance with the program of verification which, in our opinion, provides for physical verification of all major items of fixed assets at reasonable interval during the year.

(c) In our opinion, the company has not disposed off a substantial part of its fixed assets during the year and therefore, do not affect the going concern status of the Company.

2) In respect of the Company''s inventories:

(a) As explained to us, inventories were physically verified during the year by the Management at reasonable intervals except for Dankuni Unit.

(b) In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventories followed by the management appeared to be reasonable and adequate in relation to the size of the Company and nature of its business. However, shortage/excess in the inventory lying in Dankuni Unit could not be ascertained.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and in course of physical verification by the Management from time to time, no material discrepancies were found.

3. The Company has not granted but taken unsecured loans, to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. As explained to us, there is no continuing failure to correct major weakness in internal control procedures.

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956;

(a) According to the information and explanation given to us, the particulars of contracts or arrangements that need to be entered in a register in pursuance of section 301 of the Companies Act,1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transaction referred to above and exceeding the value of Rupees Five lacs in respect of any party during the year have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public during the year within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the Rules framed there under.

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

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

9. According to the information and explanation given to us in respect of statutory and other dues :

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Sales Tax, Excise Duty and other material statutory dues except (i) Rs.219.40 lacs on account of Income Tax assessed for Block Assessment years from 1985 - 86 to 20th September,1996. The Company filed a petition before the Hon''ble Calcutta High Court for inclusion of the Income Tax liability in BIFR Scheme which was turned down by the Hon''ble Calcutta High Court. The Company there after has started payment of monthly installment of Rs.4.65 lacs over and above Rs.50 lacs down payment against the said demand, and (ii) the payment of deferred Sales Tax liability of Rs.409.74 lacs has been considered in the DRS with Hon''ble BIFR and is under active consideration before Hon''ble BIFR.

(b) The details of statutory and other dues which have not been deposited on account of disputes are given below:

Particulars Financial year Forum where the to which the matter is pending matter pertains

Income Tax 1991-1992 Deputy Commissioner, Central Circle, Kolkata (Referred to I.T.O)

1993-1994 Deputy Commissioner, Central Circle, Kolkata (Referred to I.T.O)

1999-2000 Deputy Commissioner, Central Circle, Kolkata (Referred to I.T.O)

Sales Tax 2000-2001 Asst. Commissioner, Commercial Taxes, Chowringhee Circle

2010-2011 Asst. Commissioner, Commercial Taxes, Chowringhee Circle

Particulars Amount (Lac) Income Tax Rs. 24.91 Rs. 16.84 Rs. 57.95 Sales Tax Rs. 113.68 Rs. 0.99 10. The accumulated losses of the Company are more than its net worth as at end of the year. The Company has incurred cash losses during the current year as well as in the previous year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, the Company has entered into negotiated settlement with M/s.Life Insurance Corporation of India for the Term Loan of Rs.300.00 lacs NCD and Rs.175.00 lacs of Unsecured Loan at their Principal value to be repaid over a period of 5 (five) years with interest @12.5% on reducing balance method. We have observed that the Company is regular in payment of its obligations in terms of the negotiated settlement.

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

13. According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

14. According to the information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

15. No new term loan was availed by the Company during the year.

16. According to the cash flow statement and other records examined by us and the information and explanations given to us on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment.

17. The Company has not made any preferential allotment of shares during the year.

18. The Company had created security for debentures in the year 1995.

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

20. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For GORA & COMPANY (Chartered Accountants) (Firm Registration No. 327183E) Place : Kolkata Sd/-Gora Chand Mukherjee Partner Date : May 29, 2014 Membership No. 017630

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Mar 31, 2013

We have audited the accompanying financial statements of SUPER FORGINGS & STEELS LTD. which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor considers internal 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 the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

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

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

Other Matter

(a) The effect of non-provision of depreciation on Fixed Assets of Dankuni Unit as required by AS-6 on "Depreciation", non-provision of accrued leave liability and provision for Gratuity on management estimates are not based on actuarial valuation as required by AS-15 on "Accounting for Retirement Benefits" and "Impairement of Assets" as required by AS-28 on the profitability of the Company is not ascertainable.

(b) Interest on Bank Loans amounting to Rs. 5130.93 lacs, interest on Non Convertible Redeemable debenture and Term Loan from the year 2008-09 and depreciation on fixed assets of Dankuni Unit amounting to Rs. 514.03 lacs have not been provided in the accounts.

Report on Other Legal and Regulatory Requirements

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

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

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

(b) in our opinion proper books of accounts as required by the law have been kept by the Company so far as appears from our examination of such books and proper returns adequate for the purpose of our audit had been received from its branches.

(c) the reports on the accounts of the Branches, referred to above, audited by the Branch Auditors, have been forwarded to us and the same have been considered by us in preparing our report. We have been told by the management, that "Mumbai Branch" has been closed w.e.f. 1st April, 2013.

(d) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt by this Report are in agreement with the books of accounts;

(e) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in Section211(3C) of the Companies Act, 1956.

(f) as the Company has defaulted in redemption of its debentures, the Directors, of the Company have been disqualified to be appointed as Directors in other Companies in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to Paragraph 3 of our report of even date)

In our opinion and according to the information and explanation given to us, the nature of the company''s business/ activities during the year are such that clause (xii) of Companies (Auditor''s Report) Order, 2003, are not applicable to the Company. In respect of the other clauses, we report as under:

1. In respect of Company''s fixed assets:

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

(b) The fixed assets were physically verified by the management in accordance with the program of verification which, in our opinion, provides for physical verification of all major items of fixed assets at reasonable interval during the year except Dankuni Unit.

(c) In our opinion, the company has not disposed off a substantial part of its fixed assets during the year and therefore, do not affect the going concern status of the Company.

2) In respect of the Company''s inventories:

(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals except for Dankuni Unit.

(b) In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventories followed by the management appeared to be reasonable and adequate in relation to the size of the Company and nature of its business. Shortage/excess in the inventory lying in Dankuni Unit could not be ascertained.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory and in course of physical verification by the Management from time to time, no material discrepancies were found.

3. The Company has not granted but taken unsecured loans, to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. As explained to us, there is no continuing failure to correct major weakness in internal control procedure.

5. In respect of contracts or arrangements referred in Section 301 of the Companies Act, 1956:

(a) According to the information and explanation given to us, the particulars of contracts or arrangements that need to be entered in a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transaction referred to above and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public during the year within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the Rules framed their under.

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

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

9. According to the information and explanation given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Sales Tax, Excise Duty and other material statutory dues except (i) Rs. 219.40 lacs on account of Income Tax assessed for Block Assessment years from 1985-86 to 20th Sept., 1996. The Company filed a petition before the Hon''ble Calcutta High Court for inclusion of the Income Tax liability in BIFR Scheme which was turned down by the Hon''ble Calcutta High Court. The Company there after has started payment of monthly installment of Rs. 4.65 lacs over and above Rs. 50 lacs down payment against the said demand, and (ii) the payment of deferred Sales Tax liability of Rs. 412.26 lacs has been considered in the DRS with Hon''ble BIFR and is under active consideration before Hon''ble BIFR.

(b) The details of statutory and other dues which have not been deposited on account of disputes are given below:

Particulars Financial year to which Forum where the Amount (Lac) the matter pertains matter is pending

Income Tax 1991-1992 Deputy Commissioner, Central Circle, Rs. 24.91 Kolkata (Referred to I.T.O)

1993-1994 Deputy Commissioner, Central Circle, Rs. 16.84 Kolkata (Referred to I.T.O)

1999-2000 Deputy Commissioner, Central Circle, Rs. 57.95 Kolkata (Referred to I.T.O)

Sales Tax 2000-2001 Asst. Commissioner, Commercial Taxes, Rs. 113.68 Chowringhee Circle



10. The accumulated losses of the Company are more than its net worth as at end of the year. The Company has incurred cash losses during the current year as well as in the previous year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has defaulted in the repayment of dues to the financial institutions, banks and debenture holders. Debentures amounting to Rs. 300 lacs with LIC are yet to be redeemed or settled. The Company has also defaulted in repayment of dues to Financial Institutions "IDBI" amounting Rs. 450 lacs plus interest and banks amounting Rs. 2131.68 lacs plus interest.

12. According to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

14. According to the information given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

15. No new term loan was availed by the Company during the year.

16. According to the cash flow statement and other records examined by us and the information and explanations given to us on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment.

17. The Company has not made any preferential allotment of shares during the year.

18. The Company had created security for debentures issued in the year 1995.

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

20. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the company was noticed or reported during the year.



For GORA & COMPANY

(Chartered Accountants)

(Firm Registration No. 327183E)

Place : Sd/- Gora Chand Mukherjee

Kolkata - 700 001 Partner

Date : May 30, 2013 Membership No. 017630

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Super Forgings & Steels Limited as at 31st March 2012, the Statement of Profit & Loss and Cash Flow Statement for the year ended on that date annexed thereto.

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

3. As required by the companies (Auditors' Report) order, 2003, issued by the Central Government of India under sub- section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of the records of the company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. We report that:

a) The effect of non-provision of depreciation on Fixed Assets of Dankuni Unit as required by AS-6 on “Depreciation”, non- provision of accrued leave liability and provision for Gratuity on management estimates and not based on actuarial valuation as required by AS-15 on “Accounting for Retirement Benefits” and “Impairment of Assets” as required by AS- 28 on the profitability of the Company is not ascertainable.

b) The Company has not availed credit of Service Tax amounting to Rs. 2,49,799.12

c) Interest on Bank Loans amounting to Rs. 4229.15 lacs, interest on Non Convertible Redeemable Debentures and Term Loan from the year 2008-09 and depreciation on fixed assets of Dankuni Unit amounting to Rs. 475.19 lacs have not been provided in the accounts.

5. Further to our comments in the Annexures referred to in Para No. 3 above, we report that

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

b) In our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of such books and proper returns adequate for the purpose of our audit had been received from its branches.

c) The reports of the Branches, referred to above, audited by other Auditors, have been forwarded to us and the same have been considered by us in preparing our report.

d) The Balance Sheet, Profit & Loss Account & Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent applicable.

e) As the company has defaulted in redemption of its debentures, the Directors, of the Company have become disqualified to be appointed as Directors in other Companies in terms of Section 274 (1)(g) of the Companies Act, 1956.

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 subject to our comments in para (4) above, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

1. In the case of Balance Sheet of the State of Affairs of the company as on 31 st March, 2012;

2. In case of the Statement of Profit & Loss, of the Loss of the Company for the year ended on that date; and

3. In the case of Cash Flow statement, of the Cash Flows for the year ended on the date.

Annexure to the Auditors' Report

(Referred to Paragraph 3 of our report of even date)

1) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

2) The fixed assets were physically verified by the management during the year except Dankuni Unit.

3) As explained to us inventories were physically verified during the year by the management at reasonable intervals except for Dankuni Unit.

4) In our opinion and according to the information and explanation given to us, the procedure of 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. Shortage/excess in the inventory lying in Dankuni Unit could not be ascertained.

5) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

6) The company has not granted but taken unsecured loans, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

7) 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 purchase of inventory and fixed assets and for the sale of goods and services. As explained to us, there is no continuing failure to correct major weakness in internal control procedure.

8) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in a register in pursuance of section 301 of the Act have been so entered.

9) The transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five Lacs in respect of any party during the year have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

10) The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Companies Act 1956 and the rules framed their under.

11) In our opinion and to the best of our information and belief the Company has adequate internal audit system during the year under review.

12) Maintenance of Cost records under Section 209 (1 )(d) of the Companies Act, 1956 has not been prescribed by the Central Government for the Company.

13) According to the information and explanations given to us in respect of statutory and other dues:

a) The company has been regular in depositing undisputed statutory dues, including Provident Fund, Sales Tax, Excise Duty and other material Statutory dues except Rs. 219.40 lacs on account of Income Tax assessed for Block Assessment years from 1985-86 to 20th Sept. 1996 which has been referred to Hon'ble High Court for inclusion of the same in BIFR Scheme and Rs. 412.26 lacs on account of deferred sales tax liability.

b) The details of statutory and other dues which have not been deposited on account of disputes are give below:

Particulars Financial year to which Forum where the Amount (Lac) the matter pertains matter is pending

Income Tax 1991-1992 Deputy Commissioner, Central Circle, Rs. 24.91 Kolkata. (Referred to I.T.O)

1993-1994 Deputy Commissioner, Central Circle, Rs. 16.84 Kolkata. (Referred to I.T.O)

1999-2000 Deputy Commissioner, Central Circle, Rs. 57.95 Kolkata. (Referred to I.T.O)

Sales tax 2000-2001 Asst. Commissioner, Commercial Taxes, Rs. 113.68 Chowringhee Circle

14) The accumulated losses of the Company are more than of its net worth as at the end of the year. The company has incurred cash losses during the current year but not in the previous year.

15) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has defaulted in the repayment of dues to Financial Institutions, Banks and Debenture Holders. Debentures amounting Rs. 300 lacs with LIC are yet to be redeemed or settled. The Company has also defaulted in repayment of dues to Financial Institutions “IDBI” amounting Rs. 450 lacs plus interest and banks amounting Rs. 2131.68 lacs plus interest.

16) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

18) No new term loan was availed by the Company during the year.

19) According to the cash flow statement and other records examined by us and the information and explanations given to us on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment.

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

21) The company had created security for debentures issued in an earlier year.

22) The company has not raised money by public issues during the year.

23) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

Place : 8/2, Kiran Shankar Roy Road, For Abhijit Dutt & Associates

Kolkata 700 001 (Chartered Accountants)

Date : 24th August, 2012. K. BANERJEE

Partner

Membership No. 007176

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Mar 31, 2011

We have audited the attached Balance Sheet of Super Forgings & Steels Limited as at 31st March 2011, the Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto (in which are incorporated the accounts of the Company's Branches at Mumbai and Chennai, audited by other Auditors).

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

We further 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 accounts as required by law have been kept by the company so far as appears from our examination of such books and proper returns adequate for the purpose of our audit had been received from its branches.

c) The reports on the accounts of the Branches, referred to above, audited by other Auditors, have been forwarded to us and the same have been considered by us in preparing our report.

d) The Balance Sheet, Profit & Loss Account & Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable, subject to Note No. 3 of schedule 19 of Notes on Accounts regarding non provision of depreciation on Fixed Assets of Dankuni Unit as required by AS-6 on "Depreciation ", Note No. 4 regarding non provision of accrued leave liability and provision for Gratuity on management estimates and not based on actuarial valuation as required by AS-15 on "Accounting for Retirement Benefits" and Note No. 20 regarding non disclosure of related party transaction as required by AS 18 on "Related Party Disclosures" and Note No. 21 on "Impairment of Assets" as required by AS-28.

e) As the company has defaulted in redemption of its debentures, the Directors of the Company have become disqualified to be appointed as Directors in other Companies in terms of Section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comments in Para (d) above, Note No. 5 of schedule 19 regarding non provision of Interest on Bank Loans amounting to Rs. 3439.43 Lacs and Note No. 6 of schedule 19 regarding short provision of Interest on Non Convertible Redeemable Debentures and Term Loan up to 2007-08 & non provision of interest from the year 2008-09, and Note No. 3 of schedule 19 regarding non- provision of depreciation provided on fixed assets of Dankuni Unit amounting to Rs. 429.51 lacs and read together with other notes appearing in schedule 19 give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:-

i) In the case of Balance Sheet of the State of Affairs of the company as on 31st March, 2011;

ii) In case of the Profit & Loss Account of the Profit for the year ended on that date; and

iii) In the case of cash flow statement, of the cash flows for the year ended on the date.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

1) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

2) The fixed assets were physically verified by the management during the year except Dankuni Unit.

3) As explained to us inventories were physically verified during the year by the management at reasonable intervals except for Dankuni Unit.

4) In our opinion and according to the information and explanation given to us, the procedure of 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. Shortage/excess in the inventory lying in Dankuni Unit could not be ascertained.

5) In our opinion and according to the information and explanation given to us, the company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

6) The company has not granted but taken unsecured loans, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

7) 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 purchase of inventory and fixed assets and for the sale of goods and services. As explained to us, there is no continuing failure to correct major weakness in internal control procedure.

8) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in a register in pursuance of section 301 of the Act have been so entered.

9) The transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five Lacs in respect of any party during the year have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

10) The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Companies Act 1956 and the rules framed their under.

11) In our opinion and to the best of our information and belief the Company has adequate internal audit system during the year under review.

12) Maintenance of Cost records under Section 209 (1)(d) of the Companies Act, 1956 has not been prescribed by the Central Government for the Company.

13) According to the information and explanation given to us in respect of statutory and other dues:

a) The company has been regular in depositing undisputed statutory dues, including Provident Fund, Sales Tax, Excise Duty and other material Statutory dues except Rs. 219.40 lacs on account of Income Tax assessed for Block Assessment years from 1985-86 to 20th Sept. 1996 which has been referred to Hon'ble High Court for inclusion of the same in BIFR Scheme and Rs. 412.26 lakhs on account of deferred sales tax liability.

b) The details of statutory and other dues which have not been deposited on account of disputes are give below:

Particulars Financial year to which Forum where the Amount (Lakh) the matter pertains matter is pending

Income Tax 1991-1992 Deputy Commissioner, Central Circle, Rs. 24.91 Lakhs Kolkata. (Referred to I.T.O)

1993-1994 Deputy Commissioner, Central Circle, Rs. 16.84 Lakhs Kolkata. (Referred to I.T.O)

1999-2000 Deputy Commissioner, Central Circle, Rs. 57.95 Lakhs Kolkata. (Referred to I.T.O)

Sales tax 2000-2001 Asst. Commissioner, Commercial Taxes Rs. 13.68 Lakhs Chowringhee Circle

14) The accumulated losses of the Company are more than its net worth as at the end of the year. The company has not incurred cash losses during the current year as well as in the previous year.

15) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has defaulted in the repayment of dues to financial institutions, banks and debenture holders. Debentures amounting to Rs. 1000.00 lacs became due for redemption on November 2001, out of which Rs. 600 lacs NCD with UTI and Rs. 100 lacs NCD with AGIF was settled under OTS Scheme as referred in Note No. 6 of Schedule 19 of Notes on Accounts. The balance debentures amounting in Rs. 300 lacs with LIC are yet to be redeemed or settled. Accounting adjustments have been made in the books of the Company as referred to in Note No. 6 of Schedule 19. The Company has also defaulted in repayment of dues to financial Institution "IDBI" amounting Rs. 475 lacs plus interest and banks amounting Rs. 2219.68 lacs plus interest as referred to Note No. 5 & 6 of Schedule 19.

16) According to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

17) According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

18) According to the information given to us, guarantee given for loan taken by a Company from a Bank stands discharged in view of settlement with the bank and total payments in terms of the said settlement by them to the bank.

19) No new term loan was availed by the Company during the year.

20) According to the cash flow statement and other records examined by us and the information and explanations given to us on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment.

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

22) The company had created security for debentures issued in an earlier year.

23) The company has not raised money by public issues during the year.

24) To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For Abhijit Dutt & Associates

Place : 8/2, Kiran Shankar Roy Road, Chartered Accountants

Kolkata 700 001 sd/- O. P. Saxena

Partner

Date : 25th August, 2011 Membership No. 9422

---

Mar 31, 2010

We have audited the attached Balance Sheet of Super Forgings & Steels Limited as at 31st March 2010, the Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto (in which are incorporated the accounts of the Companys Branches at Mumbai and Chennai, audited by other Auditors)

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

We further 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 accounts as required by law have been kept by the company so far as appears from our examination of such books and proper returns adequate for the purpose of our audit had been received from its branches.

c) The reports on the accounts of the Branches, referred to above, audited by other Auditors, have been forwarded to us and the same have been considered by us in preparing our report.

d) The Balance Sheet, Profit & Loss Account & Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable, subject to Note No. 3 of schedule 18 of Notes on Accounts regarding non provision of depreciation on Fixed Assets of Dankuni Unit as required by AS-6 on "Depreciation", Note No. 4 regarding non provision of accrued leave liability and provision for Gratuity on management estimates and not based on actuarial valuation as required by AS-15 on "Accounting for Retirement Benefits" and Note No. 19 regarding non disclosure of related party transaction as required by AS-18 on "Related Party Disclosures" and Note No. 20 on "Impairement of Assets" as required by AS-28.

e) As the company has defaulted in redemption of its debentures, the Directors of the Company have become disqualified to be appointed as Directors in other Companies in terms of Section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subjects to our comments in Para (d) above, Note No.5 of schedule 18 regarding non provision of Interest on Bank Loans amounting to Rs. 2788.33 Lakhs and Note No.6 of schedule 18 regarding short provision of Interest on Non Convertible Redeemable Debenture and Term Loan up to 2007-08 & non provision of interest from the year 2008-09,and Note No.3 of schedule 18 regarding non- provision of depreciation provided on fixed assets of Dankuni Unit amounting to Rs.376.09 lakhs and read together with other notes appearing in schedule 18 give the information required by the Companies Act,1956 in the manner so required and give a true and fair view:-

i) In the case of Balance Sheet of the State of Affairs of the company as on 31st March, 2010;

ii) In case of the Profit & Loss Account of the Profit for the year ended on that date; and

iii) In the case of cash flow statement, of the cash flows for the year ended on the date.at

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

1) The Company has maintained proper record showing full particulars including quantitative details and situation of Fixed Assets.

2) The fixed assets were physically verified by the management during the year except Dankuni Unit.

3) As explained to us inventories were physically verified during the year by the management at reasonable intervals except for Dankuni Unit.

4) In our opinion and according to the information and explanations given to us, the procedure of 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. Shortage/excess in the inventory lying in Dankuni Unit could not be ascertained.

5) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory and no material discrepancies were noticed on physical verification.

6) The company has not granted but taken unsecured loans, to / from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

7) 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 purchase of inventory and fixed assets and for the sale of goods and services. As explained to us, there is no continuing failure to correct major weakness in internal control procedure.

8) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in a register in pursuance of section 301 of the Act have been so entered.

9) The transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

10) The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Companies Act 1956 and the rules framed their under.

11) In our opinion and to the best of our information and belief the Company has adequate internal audit system during the year under review.

12) MaintenanceofCostrecordsunderSection209(1)(d)oftheCompaniesAct, 1956 has not been prescribed by the Central Government for the Company.

13) According to the information and explanation given to us in respect of statutory and other dues:

a) The company has been regular in depositing undisputed statutory dues, including Provident Fund, Sales Tax, Excise Duty and other material Statutory dues except Rs. 219.40 lakhs on account of Income Tax assessed for Block Assessment years from 1985-86 to 20th Sept., 1996 which has been referred to Honble High Court for inclusion of the same in BIFR Scheme and Rs. 412.26 lakhs on account of deferred sales tax liability.

b) The details of statutory and other dues which have not been deposited on account of disputes are give below:

Particulars Financial year to which Forum where the Amount (Lakh)

the matter pertains matter is pending

Income Tax 1991-1992 Deputy Commissioner, Central Circle, Rs. 24.91 Lakhs Kolkata. (Referred to I.T.O)

1993-1994 Deputy Commissioner, Central Circle, Rs. 16.84 Lakhs Kolkata. (Referred to I.T.O)

1999-2000 Deputy Commissioner, Central Circle, Rs. 57.95 Lakhs Kolkata. (Referred to I.T.O)

Sales tax 2000-2001 Asst. Commissioner, Commercial Taxes, Rs. 113.68 Lakhs

Chowringhee Circle (Sp.)

14) The accumulated losses of the Company are more than of its net worth as at the end of the year. The company has not incurred cash losses during the current year corresponding to cash loss in the preceding year.

15) Based on our audit procedures and on the basis of information and explanation given by the management, we are of the opinion that the company has defaulted in the repayment of dues to financial institutions, banks and debenture holders. Debentures amounting to Rs. 1000.00 lakhs became due for redemption on November 2001,out of which Rs. 500 lakhs NCD with UTI and AGIF was settled under OTS Scheme as referred in Note No. 6 of Schedule 18 on Notes on Accounts. Out of balance debentures amounting in Rs.500 lakhs, the Company has further arrived at OTS Scheme for redemption of sum of Rs. 200 lakhs in the year 2010-11 for Rs. 120 lakhs . Accounting adjustment have been made in the books of the Company as referred to in Note No. 6 of Schedule 18. The Company has also defaulted in repayment of dues to financial Institution "IDBI" amounting Rs.475 lakhs plus interest and banks amounting Rs.2283.68 lakhs plus interest as referred to Note No. 5 & 6 of Schedule 18.

16) According to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

17) According to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

18) According to the information given to us, guarantee given for loan taken by a Company from a Bank stands discharged in view of settlement with the bank and total payments in terms of the said settlement by them to the bank.

19) No new term loan was availed by the Company during the year.

20) According to the cash flow statement and other records examined by us and the information and explanations given to us on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment.

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

22) The company had created security for debentures issued in an earlier year.

23) The company has not raised money by public issues during the year.

24) To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For Abhijit Dutt & Associates

Place: 8/2, Kiran Shankar Roy Road, Chartered Accountants

Kolkata 700 001 sd/-

G C. Mukherjee

Partner

Date: Date : 24th August, 2010 Membership No. 17630