We have audited the attached Balance Sheet of M/s. Bajaj Steel
 Industries Limited as at 31st March, 2012, the Profit & Loss Account
 and the Cash Flow Statement for the year ended on that date annexed
 hereto. These financial statements are the responsibility of the
 Company''s management.  Our responsibility is to express an opinion on
 the financial statements based on our audit.
 
 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 from material misstatement. An audit
 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 the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion and we report that:
 
 1.  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 enclose in the Annexure a statement on
 the matters specified in paragraphs 4 and 5 of the said order.
 
 2.  Further to our comments in the Annexure referred 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 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 such
 books;
 
 (c) The Balance Sheet, the Profit & Loss Account and the Cash Flow
 Statement referred to in this report are in agreement with the books of
 account;
 
 (d) In our opinion, subject to our comments hereinafter, the Balance
 Sheet, the Profit & Loss Account and the Cash Flow Statement comply
 with the Accounting Standards as referred to in Sub-section (3C) of
 Section 211 of the Companies Act, 1956;
 
 (e) On the basis of the written representation received from the
 Directors of the Company and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31st March,
 2012 from being appointed as a director in terms of clause
 
 (g) of Sub Section (1) of Section 274 of the Companies Act, 1956;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with Significant
 Accounting Policies and Notes to the Accounts, give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India :
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012,
 
 ii) in the case of the Profit & Loss Account, of the Profit of the
 Company for the year ended on that date, and
 
 iii) in the case of the Cash Flow Statements, of the Cash flows of the
 Company for the year ended on that date.
 
 BAJAJ STEEL INDUSTRIES LIMITED ANNEXURE TO THE AUDITORS'' REPORT
 Referred to in paragraph 1 of our Report of even date for the year
 ended 31st March, 2012.
 
 (i) a) As informed, proper records showing full particulars including
 quantitative details and situation of fixed assets are being compiled
 by the Company.
 
 b) According to the information and explanation given to us, all the
 fixed assets including Capital work in progress have not been
 physically verified by the management during the year but there is a
 regular program of verification which, in our opinion, is reasonable
 having regard to the size of the Company and nature of its assets. As
 explained, no material discrepancies were noticed on such verification.
 
 c) In our opinion and according to the information and explanations
 given to us, the Company has not disposed substantial part of its fixed
 assets during the year.
 
 (ii) a) According to the information and explanation given to us,
 physical verification of inventory has been conducted by the management
 at reasonable intervals.
 
 b) In our opinion, the procedure of physical verification of inventory
 followed by the management is 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 and no
 material discrepancies were noticed on physical verification of
 inventory.
 
 (iii) a) The Company has not granted any loan, secured or unsecured, to
 companies, firms or parties covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 b) The Company has taken unsecured loans from two companies covered in
 the register maintained under section 301 of the Companies Act, 1956.
 The maximum amount involved during the year was Rs. 72.19 Lacs and the
 there is no balance outstanding as at the end of the year.
 
 c) In our opinion, the rate of interest and other terms and conditions
 on which unsecured loans have been taken from such companies are, prima
 facie, not prejudicial to the interest of the Company.
 
 d) The payment of principal amounts and interest are regular as per
 stipulations, wherever such stipulations exist.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business with regard
 to purchase of inventory and fixed assets and for sale of goods and
 services. During the course of audit, we have not observed any
 continuing failure to correct major weakness, if any, in internal
 control system.
 
 (v) a) According to the information and explanations given to us, the
 particulars of contracts or arrangements referred to in section 301 of
 the Companies Act, 1956 are being updated in the register required to
 be maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions that were made in pursuance of contracts
 or arrangements that need to be entered into the register maintained in
 pursuance of Section 301 of the Companies Act, 1956 and aggregating
 during the year to Rs. 5,00,000/- or more, in respect of each party, have
 been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with the directives issued by
 Reserve Bank of India and the provisions of Sections 58A, 58AA or other
 relevant provision of the Companies Act, 1956 and the rules framed
 thereunder with regard to the deposits accepted from the public.
 
 (vii) In our opinion and according to the information and explanations
 given to us, the Company has a formal internal audit system
 commensurate with the size of the Company and nature of its business.
 
 (viii) As certified by a Cost Accountant, the company has maintained
 cost records for the year under review, as prescribed under section
 209(1)(d) of the Companies Act, 1956, read with Companies (Cost
 Accounting records) Rules, 2011 to the extent applicable to the
 Company.  We have, however, not made a detailed examination of such
 records.
 
 (ix) In our opinion and according to the information and explanations
 given to us:
 
 a) The Company is generally regular in depositing undisputed statutory
 dues including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax,
 Service Tax, Custom Duty, Excise Duty, Cess and other material
 statutory dues, as applicable, with the appropriate authorities.
 
 b) There are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
 Customs Duty, Excise Duty and Cess, as applicable, which have not been
 deposited on account of any dispute except as detailed in Annexure I.
 
 (x) There are no accumulated losses in the Company and the Company has
 not incurred any cash loss in the year under review or in the
 immediately preceding year.
 
 (xi) In our opinion and according to the information and explanation
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions or banks.
 
 (xii) According to the information and explanation given to us, the
 Company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xiii) The Company is not a chit fund or a nidhi mutual benefit
 fund/society.
 
 (xiv) The Company is not dealing in or trading in shares, securities,
 debentures and other investments. All the Shares and Securities held as
 investments are in company''s own name.
 
 (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) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purpose for which
 they were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company for the year
 under review, we report that no funds raised on short term basis have
 been used for long term investments.
 
 (xviii) The company has not made any preferential allotment of shares
 during the year under review to Companies, persons or parties covered
 u/s 301 of the Companies Act, 1956.
 
 (xix) The Company has not issued any debentures during the year under
 review.
 
 (xx) The Company has not raised any money by public issue during the
 year under review.
 
 (xxi) As per the information and explanation given to us, an employee
 of M/s Bajaj Polyblends Private Limited has misappropriated funds
 amounting to Rs.18,28,327/-of Super pack division of the Company during
 the year under review by having collusion with the customers. Necessary
 action has been taken to recover this amount from the said employee.
 
 he Annexure to our Report of even date for the year ended 31st March,
 2012
 
 Name of the 
 Statute      Nature of the 
              Dues            Amount    Relating     Forum where dispute
                             (Lacs)     to the year  Pending
 
 Central 
 Sales Tax 
 Act, 1956    Non 
              submission 
              of Forms          0.44    1998-99      Deputy Commissioner,
                                                     Sales Tax, Nagpur
 
 Central 
 Sales Tax 
 Act, 1956    Non
              submission 
              of Forms          2.16    2001 - 2002  Maharashtra Sales 
                                                     Tax Tribunal 
                                                    (Mumbai)
 
 Central 
 Sales Tax 
 Act, 1956    Non 
              submission 
              of Forms          1.83    2002-2003    Maharashtra Sales 
                                                     Tax Tribunal 
                                                    (Mumbai)
 
 Central 
 Sales Tax 
 Act, 1956    Non submission 
              of Forms          7.92    2003-2004    Deputy 
                                                     Commissioner, Sales
                                                     Tax, Nagpur
 
 Bombay 
 Sales Tax 
 Act, 1956    Non submission 
              of Forms         13.76    2003-2004    Deputy Commissioner,
                                                     Sales Tax, Nagpur
 
 Central 
 Excise 
 Act, 1944    Duty on 
              material 
              cleared after     0.43    Oct-03       Assistant 
                                                     Commissioner
              Job Work                  to Apr -
                                        2004         Chindwara
 
 The Customs 
 Act, 1962    Duty and 
              Penalty on 
              import of      136.60     2002-2003 &  CESTAT, Mumbai
              material                  2003-2004
 
 Madhya 
 Pradesh 
 Commercial   Demand on 
              regular 
              assessment        0.27    2002 - 2003  Assistant 
                                                     Commissioner,
 Tax Act, 
 1994                                                Commercial Tax
 
 Central 
 Sales Tax
 Act, 1956    Non 
              submission 
              of Forms          0.63    2004-2005    Additional
                                                     Commissioner
                                                     of Commercial Tax,
                                                     Jabalpur   
 
 Maharashtra 
 Tax on 
 entry of     Imposition 
              of Entry 
              Tax on            0.57    2009-2010    Deputy Commissioner
                                                     of
 Motor 
 Vehicles
 into local   Capital 
              Assets                                 Sales Tax (Appeal),
                                                     Nagpur
 area Act, 
 1987
 
 Income Tax 
 Act, 1961    Demand 
              under 
              Section 143
             (3)                0.24    2003-2004    Commissiner of 
                                                     Income Tax
              of the 
              Income Tax
              Act, 1961.        1.22    2004-2005   (Appeal)
 
                               31.72    2006-2007
 
                               32.06    2007-2008
  
                               50.86    2008-2009
 
 Central 
 Sales 
 Tax 
 Act,1956     Non 
              submission 
              of Forms         0.54     2006-2007    Deputy Commissioner,
                                                     Commercial Tax
                                                    (Appeal) Chindwara
 
 
 Place: Nagpur                         For B. CHHAWCHHARIA & Co.
 
                                       Chartered Accountants
 
 Date : 13.08.2012
 
                                       Ketan .Chhawchharia
 
                                       Partner
 
                                       Firm Registration No.305123E
 
                                       Membership No. 63422