We have audited the annexed Balance Sheet of M/s ASHIANA ISPAT LTD as
 at 31st March 2011 and the Profit and Loss Account for the year ended
 on that date annexed thereto and Cash Flow Statement for the year ended
 on that date. 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.
 
 1.  We have 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 of material misstatement. An audit
 includes examining on test basis evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used in significant estimates made
 by management, as well as evaluating the over all financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 2.  As required by Companies (Auditor''s Report) Amendment Order 2004
 issued by the Central Government of India in terms of Section 227 (4A)
 of the Companies Act, 1956. We enclose in the annexure a statement on
 the matters Specified in paragraph 4 & 5 of the said Order.
 
 3.  Further to put our comments in the annexure referred to in
 paragraph 2 above we state that :-
 
 (a) We have obtained all the information and explanation, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 (b) In our opinion proper books of accounts as required by law have
 been kept by the Company so far as appears from our examination of
 those books.
 
 (c) The Balance Sheet, Profit & 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 & Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards wherever applicable referred to in sub section (3C) of
 Section 211 of the Companies Act, 1956.
 
 (e) On the basis of written representation received from the Directors
 as on 31s'' March, 2011 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2011 from being appointed as a Director in terms of Section 274(1 )(g)
 of the Companies Act, 1956.
 
 (f) We report that in our opinion and to the best of our information
 and according to the explanation given to us the said accounts read
 together with the notes thereon give the information required by the
 Companies Act, 1956 in the manner so required and give a true & fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) In the case of 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 31st March,2011 and 
 
 (iii) In the case of the Cash Flow Statement, of the Cash Flows for the 
 year ended on 31st March, 2011.
 
 Annexure to Auditors'' Report
 
 Refer to in paragraph 2 of our report of even date of M/s Ashiana Ispat
 Ltd.
 
 1.  (a) The Company has maintained records of Fixed Assets in statement
 form only.
 
 (b) All the fixed assets have been physically verified by the
 management at reasonable intervals. We are informed that the management
 on such verification noticed no material discrepancies.
 
 (c) The company has not disposed off substantial fixed assets during
 the year and the going concern status of the company in not affected.
 
 2.  (a) Physical verification of Inventory has been conducted during
 the year by the management at reasonable intervals.
 
 (b) The procedures of physical verification of inventory 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 is maintaining proper records of Inventory. As
 explained to us there were no material discrepancies noticed on
 physical verification.
 
 3.  (a) The Company has taken Loans from Twenty Seven Parties covered
 in the register maintained under section 301 of the Companies Act 1956.
 The amount involved in loans taken & credited in all account is
 Rs.3234.57Lacs.  Opening Balance and Closing Balance of all these
 accounts are Rs.  746.70 Lacs and Rs. 1054.29 Lacs respectively. The
 company has not granted any loan to Companies, Firm or other parties
 listed in the register maintained under section 301 of the Companies
 act, 1956 except loan given to M/s Ashiana Commodities & Derivatives
 Pvt. Ltd, without interest having opening Balance Rs.95.48 Lacs and
 Closing Balance Rs.96.30 Lacs.
 
 (b) The rate of interest and other terms and conditions of loans taken
 by the company are not prima facie prejudicial to the interest of the
 Company.
 
 (c) The payment of the principal amount and interest thereon is on
 demand.
 
 (d) There is no overdue amount in respect of loans taken by the
 Company.
 
 4.  In our opinion and according to information and explanation given
 to us there are adequate internal control procedures commensurate with
 the size of the Company and the nature of its business, for the
 purchase of inventory, fixed assets and for the sale of goods. During
 the course of audit, we have not observed any major weakness in
 internal controls.
 
 5.  (a) In our opinion and according to the information and explanation
 given to us the transactions that need to be entered into a register in
 pursuance of section 301 of the Companies Act 1956 have been so
 entered.
 
 (b) Transactions made in pursuance of such contracts or arrangements
 have been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 6.  The Company has not accepted deposits from the public within the
 meaning of section 58A and 58AAof the Companies Act, 1956 and the rules
 framed there under.
 
 7.  The Company did not have any formal internal audit system. However
 internal check and control are maintained by the management.
 
 8.  In our opinion the cost records maintained by the company are
 general and not in precise manner as prescribed by the Central
 Government U/s 209(1) (d) of the Companies Act 1956 for the product of
 the company. We have however not made a detailed examination of these
 cost records.
 
 9.  In respect of statutory dues:
 
 (a) According to the records of the Company, undisputed statutory dues
 including Provident Fund, Employee''s State Insurance, Income Tax, Sales
 tax, Wealth tax, Service Tax, Customs Duty, Excise Duty, Cess and other
 statutory dues have been generally regularly deposited with the
 appropriate authorities. According to the information and explanations
 given to us, no undisputed amounts payable in respect of the aforesaid
 dues were outstanding as at 31st March, 2011 for a period of more than
 six months from the date of becoming payable.
 
 (b) The disputed statutory dues aggregating to Rs. 892.01 Lacs their
 against Rs. 182.72 Lacs has been deposited under protest that have on
 account of matters pending before appropriate authorities are as under:
 
 10.  The Company has no accumulated losses. The Company has not
 incurred cash losses during the financial year covered by our audit and
 immediately preceding financial year.
 
 11.  Based on our audit procedures and according to the information and
 explanation given to us, we are of the opinion that the Company has not
 defaulted in repayment of dues to financial institutions and banks
 
 12.  In our opinion and according to the information and explanation
 given to us, no loans and advances have been granted by the Company on
 the basis of security by way of pledge of shares, debentures and other
 securities.
 
 13.  In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual
 benefits fund/society. Therefore, clause 4(xiii) of the Companies
 (Auditor''s Report) Amendment Order 2004 is not applicable to the
 Company.
 
 14.  The Company has not carried out of any transactions of trading in
 securities during the year.
 
 15.  The Company has not given guarantees for loans taken by others
 from banks or financial institutions.
 
 16.  Term Loans (Car Loan) raised during the year have been applied for
 respective purpose (Buying Cars).
 
 17.  According to the information and explanations given and on an
 overall examination of the Balance Sheet of the Company, we are of the
 opinion that funds raised on short-term basis have been utilized for
 long-term purposes to the tune of Rs. 100.87 lacs.
 
 18.  During the year, the Company has not made any preferential
 allotment of shares to parties and companies covered in the Register
 maintained under Section 301 of the Companies Act, 1956.
 
 19.  The Company has not issued any debentures. Hence the question of
 creating securities in respect of debentures issued does notarise.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  In our opinion and according to the information and explanations
 given to us, no fraud on or by the Company has been noticed or reported
 during the year, that causes the financial statements to the materially
 misstated.
 
 
                                              For S.Singal & Company
 
                                               Chartered Accountants
 
                                              FirmRegn. No. 001526C
 
                                                       Sd/-
 
 Place: Bhiwadi                                   (Rakesh Gupata)
                                                     partner
 Date:10.08.2011                                  M.S.No. 073846