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Auditor Report of Gallantt Ispat Ltd.

Mar 31, 2016

Report on the Standalone Financial Statements

We have audited the accompanying financial statements of GALLANTT ISPAT LIMITED (''The Company''), which comprise the Balance Sheet as at March 31, 2016, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

The Company''s 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 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, 2015. 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.

Auditor''s 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 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 in place an adequate internal financial controls system over financial reporting 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 Directors, 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 31st March, 2016;

b) in the case of the Statement of Profit & 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 for the year ended on that date.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s 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 statement on the matters specified in the paragraph 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 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 31 March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

f) On the basis of the information and explanations of the Company provided to us, the internal financial control, framework the report of the internal auditor and in our opinion, the Company has adequate internal financial control systems in place and operating effectiveness of such controls.

g) 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 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditor''s Report to the Shareholders

Annexure to the Independent Auditor''s Report to the

Shareholders

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 2016, we report that:

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

(b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification.

(c) According to the information and explanation given to us, the title deeds of immovable properties of the Company are held in the name of the Company.

2. The inventories have been physically verified during the year by the management and in our opinion, the frequency of verification is reasonable.

As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to the book records.

3. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

4. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investment, guarantees and security.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits during the year. Therefore, the provisions of clause 3(v) of the Companies (Auditor''s Report) Order, 2016, are not applicable to the Company.

Statute

Nature of dues

Forum where dispute is Pending

Period to which the amount relates

Amount involved ('' in Lakh)

UP VAT ACT 2008

VAT

Government of Uttar Pradesh

August 2011 to March 2016

7,219.01

(Refer Note no. 39)

6. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under sub-section (1) of section 148 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however made a detailed examination of the records with a view to determine whether they are accurate and complete.

7. 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. As explained to us, the Company did not have any dues on account of employees. state insurance and duty of excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March

2016 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 material dues of income tax, sales tax, service tax, custom duty, excise duty, value added tax and cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of value added tax have not been deposited by the Company on account of disputes given below :

8. Based on our audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to financial institution, bank, Government or dues to debenture holders. There were no debenture holders at any time during the year.

9. In our opinion and according to the information and explanations given to us, the Company has not raised moneys by way of Initial Public offer or further public offer or new term loans during the year. However, the term loans outstanding at the beginning of the year have been applied for the purpose for which the loans were raised.

10. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company by its officers or employees during the year was noticed or reported, nor have we been informed of such case by the management.

11. In our opinion, 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.

12. In our opinion, the Company is not a Nidhi company. Therefore the provisions of clause 3 (xii) of the Companies (Auditor''s Report) Order, 2016, are not applicable to the Company.

13. In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required by the applicable accounting standards.

14. According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares, or fully or partly convertible debentures during the year under review and therefore, the provisions of clause 3(ix) of the Companies (Auditor''s Report) Order, 2016, are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the company has not entered in to any non-cash transactions with directors or persons connected with him.

16. In our opinion and according to the information and explanations given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure to the Independent Auditor''s Report on Standalone Financial Statements

Report on the Internal Financial Controls Under Clause (I) of Sub-Section 3 of Section 143 of the Companies Act, 2013 ("The Act")

To

The Members of

Gallantt Ispat Limited

We have audited the internal financial controls over financial reporting of GALLANTT ISPAT LIMITED ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company''s 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.

and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial 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 Company; (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 Company''s assets that could have a material effect on the financial statements.

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 the Company''s 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.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on the Company''s 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 as specified 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 over financial 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 auditor''s judgment, 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 internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial 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.

EXPLANATORY PARAGRAPH

We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the financial statements of Company, which comprise the Balance Sheet as at March 31, 2016, and the related Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, and our report dated 30 May, 2016 expressed an unqualified opinion thereon.

For Anoop Agarwal & Co. Chartered Accountants

(Amit Kumar Srivastava) Partner

Place: Kolkata Membership No. 517195 Dated: 30.05.2016 Firm Reg. no. 001739C


Mar 31, 2014

We have audited the accompanying financial statements of GALLANTT ISPAT LIMITED (''The Company''), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and 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 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 sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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 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 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. 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, subject to Note no. 41 & 42 regarding recognition of freight subsidy of Rs. 3076.94 lacs which is subject to decision of honorable High Court and in case decision comes against the Co. the profit for the year will be reduced by Rs. 3076.94 lacs.

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

b) in the case of the Statement of Profit & 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 for the year ended on that date.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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.

2. As required by section 227(3) 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

Independent Auditors'' Report

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 and with the returns received from branches not visited by us;

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

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Independent Auditor''s Report to the Shareholders (The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Gallantt Ispat Limited on the accounts of the company for the year ended 31st March, 2014)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that :

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

fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified during the year 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.

3. (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 not granted loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) 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 loan from other company covered in the register maintained under section 301 of the Companies Act, 1956. The number of such parties is two and the maximum mount involved during the year was Rs. 7046.58 Lacs and year end balance is Rs. 5400.00 Lacs.

(c) The company is regular in repaying the principal amount and interest as stipulated and no amount is overdue.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. According to the information and explanation provided by the management, the transactions that need to be entered into the register maintained U/S 301 of the Companies Act, 1956 have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. a) In our opinion and according to the information and explanations given to us, Company is generally been regular in

depositing with appropriate authorities undisputed statutory dues, as required under this clause and applicable to the Company during the year.

b) According to the information and explanations given to us, there is no undisputed amount payable in respect of statutory dues, outstanding for more than six months from the date they become payable as on 31st March, 2014.

c) Detail of dues of Value Added Tax which have not been deposited as on 31st March 2014 on account of disputes are given below :

Statute Nature of dues Forum where Period to which the Amount dispute is amount relates involved Pending (Rs in Lacs)

UP VAT VAT Government of August 2011 to 3911.00 ACT 2008 Uttar Pradesh March 2014

10. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. 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 a financial institution, bank or debenture holders.

12. 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which these were obtained.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has not made any allotment of debentures during the period under audit.

20. The Company has not raised any money by public issue during the year. However, During the year Company has, as per the terms of issue of Zero Coupon Fully Convertible Unsecured Debentures (the "FCDs"), converted 25,00,000 FCDs into 25,00,000 fully paid-up Equity Shares of Rs. 10/- each.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Anoop Agarwal & Co. Chartered Accountants (Firm Registration No. 01739C)

H. C. Pant Place: Kolkata Partner Dated: 30.05.2014 Membership No. 17694


Mar 31, 2013

Report on the financial statements

1. We have audited the accompanying financial statements of GALLANTT ISPAT LIMITED (The Company'') which comprise the Balance Sheet as at March 31'' 2013'' and the Statement of Profit and Loss and 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

2. The Company''s 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 sub-section (3C) of section 211 of the Companies Act'' 1956 ("the Act"). This responsibility includes the design'' implementation and maintenance of internal control 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

3. 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.

4. 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 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. 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.

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

6. 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: Subject to Note no. 21 & 21.1 regarding Other Income for Relinquishing of Rights on Land'' and Note no. 43 regarding recognition of freight subsidy of Rs. 3101.11 Lacs which is subject to decision of H''ble High Court and in case decision comes against the Company the profit of the company will be reduced by Rs. 3101.11 Lacs

i) In case of the Balance Sheet'' of the state of affairs of the Company as at 31st March'' 2013.

ii) In the case of Statement of Profit & Loss of'' the Profit of the Company for the year ended on that date.

iii) In the case of the Cash Flow Statement'' of the Cash Flows for the year ended on that date.

Report on other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order'' 2003 ("the Order") 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.

2. As required by section 227(3) 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 subsection (3C) of section 211 of the Companies Act'' 1956;

e) on the basis of written representations received from the directors as on March 31'' 2013'' and taken on record by the Board of Directors'' none of the directors is disqualified as on March 31'' 2013'' from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act'' 1956.

Annexure to the Independent Auditor''s Report

Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements"

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit'' we report that:

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

(b) As explained to us'' fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us'' no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us'' inventories have been physically verified during the year 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.

3. (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 not granted any loans'' secured or unsecured'' to companies'' firms or other parties listed in the register maintained under Section 301 of the Companies Act'' 1956.

(b) 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 loan from other company covered in the register maintained under section 301 of the Companies Act'' 1956. The number of such parties is two and the maximum amount involved during the year was Rs.6206.83 Lacs and year end balance is Rs 3763.58.

(c) The company is regular in repaying the principal amount and interest as stipulated and no amount is overdue.

4. In our opinion and according to the information and explanations given to us'' there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business'' for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit'' no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. According to the information and explanation provided by the management'' the transactions that need to be entered into the register maintained U/S 301 of the Companies Act'' 1956 have been so entered. The transaction exceeding the value of rupees five lakhs in respect of each party have been entered during the year'' whose market price at the relevant time of the transaction is not available before us to enable us to comment on the reasonability of the market prices at the relevant time.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act'' 1956. Therefore'' the provisions of Clause (vi) of Paragraph 4 of the Order are not applicable to the Company.

7. As per information & explanations given by the management'' the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management'' maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not'' however made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. (a) In our opinion and according to the information and explanations given to us'' Company is generally been regular in depositing with appropriate authorities undisputed statutory dues'' as required under this clause and applicable to the Company during the year.

(b) According to the information and explanations given to us'' there is no undisputed amount payable in respect of statutory dues'' outstanding for more than six months from the date they become payable as on 31st March'' 2013.

(c) Details of dues of Value Added Tax which have not been deposited as on 31st March 2013 on account of disputes are given below:

Statute Nature of dues Forum where Period to which Amount involved dispute is the amount (Rs. in Lacs) Pending relates

UP VAT Act'' VAT Government of August 2011 to 2343.14 2008 Uttar Pradesh March 2012

10. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. 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 a financial institution'' bank or debenture holders.

12. 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore'' the provision of this clause of the Companies (Auditor''s Report) Order'' 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us'' the Company is not trading in Shares'' Mutual funds & other Investments.

15. According to the information and explanations given to us'' the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. To the best of our knowledge and belief and according to the information and explanations given to us'' term loans were applied for the purpose for which these were obtained.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March'' 2013'' we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management'' we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has has not made any allotment of debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us'' we report that no fraud on or by the Company has been noticed or reported during the year'' nor have we been informed of such case by the management.

For Anoop Agarwal & Co.

Chartered Accountants

(Registration No. 01739C)

(H.C Pant)

Place :Kolkata Partner

Dated: May 25'' 2013 Membership No. 17694


Mar 31, 2012

1. We have audited the attached Balance Sheet of GALLANTT ISPAT LIMITED as at 31st March, 2011, the Statement of Profit & Loss and also the Cash Flow Statement for the year ended on that date, annexed thereto. 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.

2. 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 from material misstatement. An audit also 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comment in the annexure referred to in Paragraph 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 my 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 the 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 Accounts.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from directors and taken on record by the Board of Directors, we report that none of the director is disqualified from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 as on 31st March, 2012.

f. We draw attention to note no. 24 & 24.2 regarding other Income from commission and profit on sale of rights on land.

g. In our opinion and to the best of our knowledge and according to the explanation given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner as required, and give a true and fair view in conformity with the accounting principles generally accepted in India :

i) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

ii) In the case of Statement of Profit & Loss, of the Profit of the Company for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date



Annual Report 2011-2012 21

(Referred to in paragraph 3 of our report of even date)

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

b) Fixed assets have been physically verified by the Management. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c) No fixed assets have been disposed during the year.

ii) a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

b) 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) The Company has maintained proper records of its inventories. No material discrepancies were noticed on physical verification.

iii) a) The Company had taken loan from other company covered in the register maintained under section 301 of the Companies Act, 1956. The number of such parties is three and the maximum amount involved during the year was Rs. 2025.28 lacs and year and balance is Nil. The company has granted loans, secured or unsecured to Companies, firms or other parties, covered in the register maintained under section 301 of the Act. The number of such party is one and the maximum amount involved during the year was Rs. 185.00 Lacs and year end balance is Nil.

b) In our opinion, the rate of interest and other terms and conditions on which loan has been taken and granted from company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie prejudicial to the interest of the company.

c) The company is regular in repaying the principal amount and interest as stipulated and no amount is overdue.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business, for the purchase of inventories, fixed asset and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

v) According to the information and explanation provided by the management, the transactions that need to be entered into the register maintained U/S 301 of the Companies Act, 1956 have been so entered. The transaction exceeding the value of rupees five lakhs in respect of each party have been entered during the year, whose market price at the relevant time of the transaction is not available before us to enable us to comment on the reasonability of the market prices at the relevant time.

vi) The Company has not accepted any deposit from the public as stipulated under the Provisions of section 58A and 58AA of the Companies Act, 1956.

vii) The Company has an internal audit system which, in our opinion, is commensurate with the size and nature of its business.

viii) The Central Government has prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956.

ix) a) In our opinion and according to the information and explanations given to us, Company is generally been regular in depositing with appropriate authorities undisputed statutory dues, as required under this clause and applicable to the Company during the year.

b) According to the information and explanations given to us, there is no undisputed amount payable in respect of statutory dues, outstanding for more than six months from the date they become payable as on 31st March, 2012.

c) Details of dues of Value Added Tax which have not been deposited as on 31st March, 2012 on account of disputes are given below:

Statute Nature of dues Forum where Period to which Amount in volved dispute is the amount (Rs. in Lakh) Pending relates

UPVAT Act, VAT Government of August 2011 to 953.96 2008 Uttar Pradesh March 2012

x) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi) Based on our audit procedure and on the basis of information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions or banks.

xii) According to the information and explanations 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.

xiii) The Company is not a chit fund or nidhi/mutual benefit fund/society, therefore clause 4(xiii) of the order is not applicable to the Company.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, other investments and contracts.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which these were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short term basis have been used for long term investment.

xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under seciton 301 of the Companies Act 1956.

xix) During the year the company has allotted 2500000,0% Fully Convertible Debentures of Rs. 10 each at a premium of Rs. 150.00 each.

xx) During the Year the company has not raise any money by way of public issue.

xxi) In our opinion and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Anoop Agarwal & Co.

Chartered Accountants

(Registration No. 01739C)

(H.C.Pant)

Place : Kolkata Partner

Dated : August 13, 2012 Membership No. 17694


Mar 31, 2011

1. We have audited the attached Balance Sheet of GALLANTT ISPAT LIMITED as at 31st March, 2011, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date, annexed thereto. 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.

2. 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 from material misstatement. An audit also 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comment in the annexure referred to in Paragraph 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 my 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 the books.

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

d. In our opinion, the Balance Sheet, Profit and Loss account and the Cash Flow Statement dealt by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from directors and taken on record by the Board of Directors, we report that none of the director is disqualified from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 as on 31st March, 2011.

f. In our opinion and to the best of our knowledge and according to the explanation given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner as required, and give a true and fair view in conformity with the accounting principles generally accepted in India :

i) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

ii) In the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date

Annexure to the Auditor's Report (Referred to in paragraph 3 of our report of even date)

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

b) Fixed assets have been physically verified by the Management. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c) No fixed assets have been disposed during the year.

ii) a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

b) 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) The Company has maintained proper records of its inventories. No material discrepancies were noticed on physical verification.

iii) a) The Company had taken loan from other company covered in the register maintained under section 301 of the Companies Act, 1956. The number of such parties is three and the maximum amount involved during the year was Rs.5840.11 Lacs and year end balance is Rs.1741.82 Lacs. The company has granted loans, secured or unsecured to Companies, firms or other parties, covered in the register maintained under section 301 of the Act. The number of such party is one and the maximum amount involved during the year was Rs.150.00 Lacs and year end balance is Rs 150.00 Lacs.

b) In our opinion, the rate of interest and other terms and conditions on which loan has been taken and granted from company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie prejudicial to the interest of the company.

c) The company is regular in repaying the principal amount and interest as stipulated and no amount is overdue.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business, for the purchase of inventories, fixed asset and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

v) According to the information and explanation provided by the management, the transactions that need to be entered into the register maintained U/S 301 of the Companies Act, 1956 have been so entered. The transaction exceeding the value of rupees five lakhs in respect of each party have been entered during the year, whose market price at the relevant time of the transaction is not available before us to enable us to comment on the reasonability of the market prices at the relevant time.

vi) The Company has not accepted any deposit from the public as stipulated under the Provisions of section 58A and 58AA of the Companies Act, 1956.

vii) The Company has an internal audit system which, in our opinion, is commensurate with the size and nature of its business.

viii) The Central Government has prescribed the maintenance of cost records under section 209(l)(d) of the Companies Act, 1956.

ix) a) In our opinion and according to the information and explanations given to us, Company is generally been regular in depositing with appropriate authorities undisputed statutory dues, as required under this clause and applicable to the Company during the year.

b) According to the information and explanations given to us, there is no undisputed amount payable in respect of statutory dues, outstanding for more than six months from the date they become payable as on 31st March, 2011.

c) According to the information and explanations given to us, there are no statutory dues that have not been deposited with the appropriate authorities on account of any dispute.

x) The Company has accumulated losses of Rs. 302.13 Lacs at the end of the financial year but has not incurred any cash losses during the financial year covered by our audit.

xi) Based on our audit procedure and on the basis of information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions or banks.

xii) According to the information and explanations 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.

xiii) The Company is not a chit fund or nidhi/mutual benefit fund/society, therefore clause 4(xiii) of the order is not applicable to the Company.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, other investments and contracts.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which these were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short term basis have been used for long term investment.

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

xix) The Company has not issued any debentures during the year.

xx) During the year the Company has raised funds throught public issue. The end use of funds has been disclosed in Note No. 8 of the "Notes of Accounts" forming part of the financial statements. The end use of money raised by Public issue has been verified by us.

xxi) In our opinion and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Anoop Agarwal & Co.

Chartered Accountants

(Registration No. 01739C)

(H.C Pant)

Partner

Dated: May 28, 2011 Membership No. 17694


Mar 31, 2009

1. We have audited the attached Balance Sheet of GALLANTT ISPAT LIMITED as at 31stMarch, 2009, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date, annexed thereto. 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.

2. 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 from material misstatement. An audit also 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 in terms of section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comment in the annexure referred to in Paragraph 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 my 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 the books.

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

d. In our opinion, the Balance Sheet, Profit and Loss account and the Cash Flow Statement dealt by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from directors and taken on record by the Board of Directors, we report that none of the director is disqualified from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 as on 31st March, 2009.

f. In our opinion and to the best of our knowledge and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956 in the manner as required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009.

ii) In the case of Profit & Loss Account, of the profit of the Company for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

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

b) Fixed assets have been physically verified by the Management. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c) No fixed assets have been disposed during the year.

ii) a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) 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) The Company has maintained proper records of its inventories. No material discrepancies were noticed on physical verification.

iii) a) The Company had taken loan from other company covered in the register maintained under section 301 of the Companies Act, 1956. The number of such party is one and the maximum amount involved during the year was Rs. 1273.00 Lacs and year end balance is Rs.Nil. The company has granted loans, secured or unsecured to Companies, firms or other parties, covered in the register maintained under section 301 of the Act. The number of such party is one and the maximum amount involved during the year was Rs.700.00 Lacs and year end balance is Rs.Nil

b) In our opinion, the rate of interest and other terms and conditions on which loan has been taken and granted from company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie prejudicial to the interest of the company.

c) The company is regular in repaying the principal amount and interest as stipulated and no amount is overdue.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business, for the purchase of inventories, fixed asset and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

v) According to the information and explanation provided by the management, the transactions that need to be entered into the register maintained U/S 301 of the Companies Act, 1956 have been so entered. The transaction exceeding the value of rupees five lakhs in respect of each party have been entered during the year, whose market price at the relevant time of the transaction is not available before us to enable us to comment on the reasonability of the market prices at the relevant time.

vi) The Company has not accepted any deposit from the public as stipulated under the Provisions of section 58A and 58 AA of the Companies Act, 1956.

vii) The Company has an internal audit system which, in our opinion, is commensurate with the size and nature of its business.

viii) The Central Government has prescribed the maintenance of cost records under section 209(l)(d) of the Companies Act, 1956. However since the Company is under pre-operational stage of Steel Plant, maintenance of cost records is not applicable during the year, to the Company.

ix) a) In our opinion and according to the information and explanations given to us, Company is generally been regular in depositing with appropriate authorities undisputed statutory dues, as required under this clause and applicable to the Company during the year.

b) According to the information and explanations given to us, there is no undisputed amount payable in respect of statutory dues, outstanding for more than six months from the date they become payable as on 31st March, 2009.

c) According to the information and explanations given to us, there are no statutory dues that have not been deposited with the appropriate authorities on account of any dispute.

x) The Company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and since this is first year of the companys commercial operation comment on the immediately preceding financial year is not applicable.

xi) Based on our audit procedure and on the basis of information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions or banks.

xii) According to the information and explanations 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.

xiii) The Company is not a chit fund or nidhi/mutual benefit fund/society, therefore clause 4(xiii) of the order is not applicable to the Company.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, other investments and contracts.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which these were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short term basis have been used for long term investment.

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

xix) The Company has not issued any debentures during the year.

xx) During the year the Company has not raised any money by way of public issue. Hence clause (xx) of Para 4 of the order is not applicable.

xxi). In our opinion and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For A.K. Meharia & Associates

Chartered Accountants

(A. K. Meharia) Partner

Dated: 27th July, 2009 , Membership No.53918

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