To

The Members of

Impex Ferro Tech Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone Financial Statements of M/S IMPEX FERRO TECH LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards, and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

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

Opinion

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

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

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

(c) In the case of Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Emphasis of Matter

1. We draw attention to Note No.27 of the financial results, relating to CDR Package. The CDR Package of the company has been sanctioned vide LOA dated 10th November, 2014. Pursuant to the said LOA, implementation of CDR policy is completed and the effect thereof has been given in these accounts with respect to the CDR scheme as per the said LOA. The said accounts are subject to confirmation and reconciliation with the Lenders. The reported financials would have consequential impact once the reconciliation is completed, the quantum where of remains unascertained.

Our report is not qualified in respect of this matter.

2. We draw attention to the Note No. 39 of the statement which indicates that as at March 31st 2015, the accumulated losses amounting to Rs. 6,349.26 Lacs has substantially eroded net worth of the Company, indicating the existence of a material uncertainty about the company's ability to continue as a going concern. These financial results have been prepared on a going concern basis for the reasons stated in the said note.

Our report is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2015 (Rs.the order') issued by the Central Government of India in terms of subsection (11) of the section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i. The Company has disclosed the impact of pending litigations on the financial position in the Financial Statements - Refer Note - 28 A(b) to (f) to its Financial Statements ;

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

iii. There were no amounts which were required to be transferred by the Company to the Investor Education and Protection fund.

For R. Kothari & Company
Chartered Accountants
FRN : 307069E
Manoj Kumar Sethia
Place : Kolkata Partner
Date : 30th May, 2015 Membership No. 064308

Annexure to the Independent Auditors' Report

Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements” of even date to the members of IMPEX FERRO TECH LIMITED on the accounts of the Company for the year ended 31st March 2015. On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

(b) All fixed assets were physically verified by the management during the year in accordance with a planned program of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventory, except goods-in-transit has been physically verified by the management during the year. In respect of inventory lying with the third parties, these have substantially been confirmed by them. In our opinion, the frequency of such verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and the same have been properly dealt with in the books of account.

(iii) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 189 of the Companies Act, 2013. Therefore, the provisions of Clause (iii) (b), (c) and (d) of the said Order are not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, there is an adequate Internal Control System commensurate with the size of the Company and the nature of its business for the purchase of inventories and 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 system.

(v) The Company has not accepted any deposits from the public and consequently, the directives issued by Reserve Bank of India and provisions of Section 73 to Section 76 of the Companies Act, 2013 and the rules framed there under are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of manufacture of Iron & steel product & Power generation unit pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013, and we are of the opinion that prima facie, the records have been maintained. We have not however made a detailed examination for the records with a view to determining whether they are accurate and complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been regularly deposited undisputed amount payable in respect of Provident Fund, Employees' State Insurance, Income -Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Value Added Tax, Cess, Professional Tax, and other Statutory Dues during the year with appropriate authorities. However, there have been delays in few cases.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited as on 31st March, 2015 with the appropriate authorities on account of any dispute except the following cases which are as follows:

Name of the statute Nature of Dues Financial Year Rs./Lacs Forum where Dispute is Pending
Central Excise Act, 1994 2005-06 12.36 Commissioner of Central Excise (Appeals) (III)
Excise Duty 2005-06 and 2006-07 8.26 CESTAT, Calcutta Bench
2006-07 0.5 Commissioner of Central Excise (Appeals) (IV)
2007-08 15.55 CESTAT, Calcutta Bench
Total 36.67 Rs. 20.92 Lacs paid under protest
Name of the statute Nature of Dues Financial Year Rs./Lacs Forum where Dispute is Pending
Central Sales Tax and Local Sales Tax Act VAT 2005-06 304.13 WBCT, Appellate and Revisional Board
2006-07 479.91 WBCT, Appellate and Revisional Board
2008-09 748.45 WBCT, Appellate and Revisional Board
2009-10 211.18 Sr. Joint Commissioner of Commercial Taxes
Total 1,743.67 Rs. 88.62 Lacs paid under protest
W.B. Entry Tax Act Entry Tax 2012- 13 and 2013- 14 272.51 Hon'ble High Court of Calcutta
Total 272.51 Rs. NIL paid under protest
Income Tax Act, 1961 Income Tax 2011-12 1606.46 Commissioner of Income Tax (Appeals), Kolkata
Total 1606.46 Rs. NIL paid under protest

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

(viii) The accumulated losses at the end of the financial year are not less than fifty percent of its net worth and the company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the financial institutions or banks.

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

(xi) In our opinion and according to the information and explanations given to us, the term loan have been applied for the purpose they were obtained.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For R. Kothari & Company
Chartered Accountants
FRN : 307069E
Manoj Kumar Sethia
Place : Kolkata Partner
Date : 30th May, 2015 Membership No. 064308