Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the preparation of these financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as "the Act") 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. The Board of Directors of the companies are responsible for 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; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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, which have been used for the purpose of preparation of the financial statements by the Directors of the Company, as aforesaid.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. While conducting the 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 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 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 an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Board of Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations 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 31,2015;

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

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

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements: a) Note 21.15 to the financial statements which, describes the uncertainty related to the outcome of the winding up petition filed against the Company by M/s Suryoday Allo Metal Powders Limited during the FY 2013-14.

b) Note 21.4 in the financial statement which indicates that the Company has accumulated losses and its Net worth has been fully eroded, the Company has incurred Net Loss of Rs. 4.14 Crore during the current financial year (Previous Year Rs. 151.88 Crore) and net cash loss during the current year of Rs. 0.39 Crore (Previous year Rs. 3.12 Crore) also, the Company current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters set forth in Note : 21.15 indicate the existence of a material uncertainty that cast significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the Note No. 21.16

Our opinion is not modified in respect of these matters.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, based on the comments in the auditors' reports of the Company, we give in the Annexure 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 purposes of our audit, except information and explanations read with auditors' report for the year ended 31.03.2010;

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, the 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) The going concern matter described in sub-paragraph (b) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

g) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us we further report that :-

- As Stated in Note no. 21.1 regarding FCCB, the maturity date of said FCCB was 13th day of February 2014.The Company has given proposals to the FCCB holders to convert their bonds into fully paid equity shares and the same is under the process of negotiations. However the company has become defaulted in making payment of interest installments to FCCB holders which were dueon 12th August 2013 &12th February, 2014.

- As stated in Point No.21.17 that during the financial year 2011-12 the company had acquired the assets & liabilities of its associate company i.e. M/s Sancia Infraglobal Private Limited. However the same transaction could not completed due to not getting the requisite approvals from the relevant authorities and being restated.

- As stated in Note No. 21.6 there was an inquiry operation on 04th day of June, 2014 conducted by DGCEI, Zonal Unit, Mumbai to ascertain facts regarding evasion of the service tax under Central Excise Act, 1944 read with section 83 of the finance act, 1994. However the company has not made any provision towards liability of service tax for the period covered under the aforesaid search and seizure.

- The Accumulated losses of the Company is Rs. 408.12 Crores (Previous year: Loss Rs. 403.95crores) and its net worth is negative Rs.203.14 Crores(Previous period: Negative Rs. 191.16crores) at the end of the reporting period which indicates erosion of Net worth of the Company. The Company can be termed as"SICK" within the meaning of clause (O) of sub section (1) of section 3 of the Sick Industrial Companies (Special Provision) Act, 1985. "The Company has made a reference during the financial year 2012-13 to the "Board for Industrial & Financial Reconstruction" under section 15(1) of Sick Industrial Companies (Special Provisions) Act 1985 however the same reference has been declined by BIFR."Considering the same, the Company's ability to continue as going concern is in doubt and will depend upon any revival programme by Bankers/Government.

- As stated in Note No. 21.16 the Company has defaulted in making payments to secured creditors and also not provided for interest on the banking facilities availed from the banks. The secured creditors had declared the account as a Non Performing Asset (NPA) and initiated notice under Section 13(2) as per the SARFAESI Act 2002. Further Bank of India have assigned all the rights, title and interest in financial assistance in favour of "Edelweiss Asset Reconstruction Company Limited (EARC)" vide letter No. EdelARC/3985-2014 dated April 30, 2014 received from "Edelweiss Asset Reconstruction Company Limited."

- During the F.Y 2013-14 M/s Suryoday Allo Metal Powders Limited, a company registered under the companies Act, 1956 and having its Registered office at 302, B- Wing, Narayan Chamber, 555 Narayan Peth Pune- 411030 (Maharashtra) filed a legal suit in the court at Kolkata for winding-up the company due to defaulting of payment of Rs. 1,04,19,948/- by M/s Sancia Global Infraprojects Limited.

- Company has not made Provision for Interest on Working Capital Facility and Term Loan availed from Bank of India and State Bank of India, pursuant to classification of its account by the concerned Banks and Financial Institution as Non-performing Assets (NPA).

- Balances of Loans, Sundry Debtors, Loans and Advances, deposits and Current Liabilities, are subject to confirmation from the respective parties and reconciliation, if any.

Annexure to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2015, we report that.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets subject to the annexure to the Auditors Report for the period ended on 31.03.2010.

(b) As explained to us, all fixed assets have not been physically verified by the management during the period but there is a regular programme of verification 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.

(c) As per the information and explanation given to us, the management of company has observe that part of the block of assets (Equipments/Machineries) become obsolete due to efflux of time, wear and tear and more so due to technological obsolescence and have very little or scrap value and the cost of operations and maintenance of such old machines is high as such could not withstand the competition from the similar modern machines/equipments in the market. The gross block/value of such types of assets is approx. 26 Crores, however, it has no effect on the going concern assumption.

(ii) (a) As explained to us, inventories have been physically verified during the reporting period by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories 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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records subject to the annexure to the Auditors Report for the previous financial period ended on 31.03.2010.

(iii) (a) The Company has granted loans to bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act') The balances as at the close of the reporting period is Rs. 0.59 Crores (P.Y. 0.69 Crores).

(b) In the case of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the Company had granted interest free unsecured loans. The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 3(iii)(b) of the Order is not applicable to the Company in respect of repayment of the principal amount.

(c) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company had taken interest free unsecured loans from companies, and other parties listed in the register maintained under Section 189 of the Companies Act, 2013, repayable on call basis. The balances as at the close of the reporting period is Rs. 108.50 Crores (P.Y. 109.32 Crores).

In our opinion, the other terms and conditions on which the loans have been taken is prima facie, not prejudicial to the interest of the company.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act.

(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. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits from the public during the year.

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable except Professional tax, Sales tax, service tax and Income tax.

(b) According to information and explanations given to us, some dues of income tax, sales tax, and service tax have not been deposited by the Company on account of disputes.

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under, the company have not made any provision or transfer of such fund.

(viii) The Accumulated losses of the Company is Rs. 408.12 Crores (Previous year: Loss Rs. 403.95crores) and its net worth is negative Rs.203.14 Crores(Previous period: Negative Rs. 191.16crores) at the end of the reporting period which indicates erosion of Net worth of the Company. The Company can be termed as"SICK" within the meaning of clause (O) of sub section (1) of section 3 of the Sick Industrial Companies (Special Provision) Act, 1985.

(ix) The Company is having outstanding dues to financial institutions or banks and fccb holders during the year as mentioned under the Emphasis of Matters & Report on other Legal and Regulatory Requirements paragraph above.

(x) In our opinion and according to the information and the explanations given to us, the Company has given guarantees for loan taken by others from a bank or financial institution. In our opinion and according to the information and explanation given to us, the terms & conditions of the guarantees given by the company for loans taken by others form banks and financial institutions, are not primafacie prejudicial to the interest of the company.

(xi) The Company is having term loans outstanding during the year as mentioned under the Emphasis of Matters & Report on other Legal and Regulatory Requirements paragraph above.

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

For Arup Das & Associates (Chartered Accountants)

Sd/-

Arup Das Proprietor Membership No.:053564) FRN: 318034E

Place : Kolkata Date : 30.05.2015