Nova Steels (India) Ltd Auditors Report.

To The Members of

NOVA STEELS (INDIA) LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of NOVA STEELS (INDIA) LIMITED, which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss and the Cash Flow Statement for the period then ended and a summary of significant accounting policies and other explanatory information for the period then ended.

Managements Responsibility for the Financial Statements

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

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 Companys 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 entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with other significant accounting policies in Pt. A(a) of Note-1, regarding the preparation of accounts on the basis that the company is not a going concern and Pt. B(2) of Note-1 regarding the outcome of Winding Up Petition filed in the High Court of Bilaspur, Chattisgarh , we report that 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 at31STMarch, 2016;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section 11 of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in 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 purpose of our audit of the aforesaid financial statements;

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 and Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and

g) With respect to the other matters to be included in the Auditors 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;

The Company has disclosed the impact of pending litigations on its financial position in 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 to the Investor Education and Protection Fund by the Company

FOR ANTIMA & GOEL
Chartered Accountants
Firm Registration No: 009062N
Place: New Delhi R.B. GOEL
Date: 9th August, 2016 Partner
M.No:086862

ANNEXUREA

(Referred to in paragraph 1 of our report of even date on the other legal and regulatory requirements for the year ended 31st March 2016)

I. As all the Fixed Assets had been taken over by the Financial Institutions/ Bank in earlier years, the Company is left with no Fixed Assets. Therefore, the question of physical verification of fixed asset does not arise, consequently the question of comparison of assets physically verified with the book records and ascertaining the discrepancies, if any, does not arise. There has been no disposal of fixed assets during the year. This has also affected the Going Concern Status of the Company and the management has prepared the accounts on the basis that the Company is not a going concern.

II. As there is no Inventory of any nature, this clause is not applicable.

III. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in Register maintained u/s 189 of the Companies Act, 2013. Therefore the provisions of Clause 3 (iii) (a) and (iii) (b) of the said Order are not applicable to the Company.

IV. In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans and advances given, investments made, guarantees , and securities given have been complied with by the Company.

V. To the best of our knowledge and according to the information and explanations given to us, the company has not accepted any deposits covered under Section 73 to Section 76 or any other provisions of the Companies Act, 2013. No order was passed by Company Law Board /RBI or any other Court or Tribunal. Therefore, the provisions of clause 3(v) of the Order are not applicable.

VI. According to the information and explanations given to us and to the best of our knowledge, the Central Government has not prescribed maintenance of cost records under Section 148 (1) of the Companies Act, 2013 for the products of the Company. Therefore, the provisions of clause 3(vi) of the Order are not applicable.

VII. According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees

State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess, Service Tax and other statutory dues with the appropriate authorities. According to the information and explanations given to us, No Undisputed amount is payable in respect of Wealth Tax, Custom Duty were outstanding, at the period end for a period of more than six months from the date they became payable EXCEPT Income Tax, Sales Tax and Excise Duty amounting to Rs. 20144572/-, Rs.3167444/-, and Rs. 3760694/- respectively.

According to the records of the Company, there are no dues outstanding of Wealth tax, Custom Duty, Excise Duty, Cess on account of any Dispute EXCEPT Sales Tax and Income Tax as per details given below.

Nature of Statute Nature of Dues Amount (Rs.) Period to which the amount relates Forum where dispute is pending
Sales Tax Demand 53350 A.Y.1990-91 Sales Tax Officer (Pending for rectification Credit not given of Tax challan)
Demand 237688 A.Y.1991 -92 Dy. Commissioner, (Appeal)
Demand 1571357 A.Y.1994 -95 Dy. Commissioner, (Appeal)
Demand 1706188 A.Y.1995-96 Dy. Commissioner, (Appeal)
Income Tax Demand 12838796 A.Y.1992-93 Appeal pending before ITAT
Demand 36621887 A.Y.1993-94 Appeal pending before ITAT
Demand 70653626 A.Y.1994-95 Appeal pending before ITAT
Demand 13849527 A.Y.1995-96 Appeal pending before ITAT
Demand 2696546 A.Y.1996 -97 Appeal pending before ITAT
Demand 923377 A.Y.1999-2000 Appeal pending before ITAT
FERA Demand Penalty 30000000 Order dated 11/02/2008 Appeal pending before Appellate Tribunal for Foreign Exchange.

VIII. Based on our audit procedure and in accordance with the information and explanation given to us by the management the Company has not defaulted in repayment of dues to Financial Institutions or Banks or Debenture holders during the period.

IX. In our opinion, the company has not raised any monies by way of initial public offer or further public offer (including debt instruments) or raised any term loan during the period. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company.

X. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

XI. According to the information and explanations given to us by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

XII. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

XIII. According to the information and explanations given to us by the management and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

XIV. According to the information and explanations given to us by the management and based on our - examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, the provisions of Clause 3(iv) of the Order are not applicable to the Company.

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

XVI. In our opinion, the Company is not required to be registered under section 45-IAof the Reserve Bank of IndiaAct, 1934.

FOR ANTIMA & GOEL
Chartered Accountants
Firm Registration No: 009062N
Place: New Delhi R.B. GOEL
Date: 9th August, 2016 Partner
M.No: 086862

ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NOVA STEELS (INDIA) LIMITED ("the Company") for the period ended 31st March, 2016, in conjunction with our audit of the financial statements of the Company for the period ended on that date.

Managements Responsibility for Internal Financial Controls

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

Auditors Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the Internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

FOR ANTIMA & GOEL
Chartered Accountants
Firm Registration No: 009062N
Place: New Delhi R.B GOEL
Date: 9th August, 2016 Partner
M.No:086862