Terruzzi Fercalx India Ltd Auditors Report.

INDEPENDENT AUDITOR

To,

The Members of

VULCAN ENGINEERS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Vulcan Engineers Limited ("the Company"), which comprise the balance sheet as at 31st December 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.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in subsection (3C)of section 211 of the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13lh September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act,2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that 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 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 Companys 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 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 31S: December 2013;

(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.

Emphasis of Matter

We draw attention to note no.36 of the financial statements in regard to amount aggregating to Rs. 45,026,202 due to Holding company which has remained unsettled beyond time period as approved by Reserve Bank of India. Our opinion is not qualified n respect of this matter. i

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act),read with the General Circular 15/2013 dated 13th September 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 of the Company as on 31 December 2013 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 December 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

FOR SURESH SURANA & ASSOCIATES LLP

Chartered Accountants

ICAI Registration Number: 121750W / W-100010

(Vinodkumar Varma)

PARTNER

Membership No. 105545

Place: Mumbai

Dated: 28th February 2014

ANNEXURE TO THE AUDITORS REPORT

[REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING OF REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE]

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

(b) All the fixed assets are physically verified by the management according to a phased programme designed to cover all items over a period of three financial years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed by the management on such verification.

(c) During the year, the Company has not disposed off any part of its fixed assets.

2. (a) According to the information and explanation given to us, inventories purchased by the Company from its suppliers are directly dispatched to customers. In the absence of any inventory being stocked by the Company, clause 4(ii)(a) and 4(ii)(b) of the Order are not applicable to the Company

(b) On the basis of our examination of the inventory records, in our opinion, the Company has maintained proper records of inventory.

3. According to information and explanations given to us, the Company has not granted/taken any loan, secured or unsecured, to/from Companies, firms and other parties covered in the Register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

4. 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, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been recorded in the register.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 of the Act have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed thereunder during the year.

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

8. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1 )(d) of the Act in the case of the Company.

9. (a) According to the information and explanation given to us, the Company has been generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as on the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues on account of income tax, sales tax, service tax, customs duty, wealth tax, excise duty and cess, which have not been deposited on account of any dispute.

10. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth and the Company has incurred cash loss during the current financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the banks. The Company does not have any borrowings from financial institutions and by way of debentures.

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

13. According to the information and explanations given to us, the Company Is not a chit fund or a nidhi / mutual benefit fund / society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions during the year.

16. According to the information and explanations given to us, the Company has not taken any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, as at 31st December 2013, funds raised on short term basis have not been used for long term investments.

18. The Company has not made preferential allotment of shares to the parties or companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way of public issue during the year.

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

FOR SURESH SURANA & ASSOCIATES LLP

Chartered Accountants

ICAI Reg. No. 121750W/W-100010

(Vinodkumar Varma)

PARTNER

Membership No. 105545

Place: Mumbai

Dated: 28lh February 2014