We have audited the attached Balance Sheet of DECCAN GOLD MINES
 LIMITED, as at 31 March 2012 and also the Profit and Loss Account and
 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.
 
 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 of 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 management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003(as
 amended) issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of The Companies Act, 1956 we enclose
 the annexure statement on the matters specified in paragraphs 4 and 5
 of the Order.
 
 2.  Further to our comments in the Annexure referred to in Paragraph 1
 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 it appears from our examination of
 those books.
 
 c.  The Balance Sheet, 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 the Balance Sheet, Profit & Loss Account and the
 Cash Flow Statement dealt with 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 as
 on 31 March, 2012 and taken on record by the Board of Directors, we
 report that none of the Directors are disqualified as on 31 March, 2012
 from being appointed as a director in terms of clause (g) of
 sub-section (i) 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 together with the
 notes thereon 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 Balance Sheet, of the state of affairs of the
 Company as at 31 March, 2012, and
 
 II.  In the case of Profit & Loss Account, of the LOSS of the company
 for the year ended on that date, and
 
 III.  In the case of Cash Flow Statement, of the Cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITOR''S REPORT OF EVEN DATE (Referred to in paragraph
 1 thereof)
 
 1.  In respect of Fixed Assets –
 
 a) The company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 b) The fixed assets have been physically verified by the management at
 reasonable intervals during the year.  We are informed that no material
 discrepancies were noticed by the management on such verification.
 
 c) Based on our scrutiny of the records of the company and the
 information & explanation received by us, we report that there were
 sales of fixed assets during the year but the fixed assets disposed of
 did not constitute a substantial part of the fixed assets of the
 company. Hence, the question of reporting whether the sale of any
 substantial part of fixed assets has affected the going concern of the
 company does not arise.
 
 2.  As the company has not purchased or sold any goods during the year,
 nor does the company have any opening stock, therefore the requirement
 to report the physical verification of stocks or maintenance of
 inventory records in our opinion, does not arise
 
 3.  The company has not granted or taken any loans to/from companies,
 firms or other party covered in the register maintained u/s.301 of the
 Companies Act, 1956.
 
 4 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 the nature of its business. Further,
 on the basis of our examination of the books and records of the
 company, carried out in accordance with the auditing standards
 generally accepted in India and according to the information and
 explanations given to us, we have neither come across nor have we been
 informed of any continuing failure to correct weaknesses in the
 aforesaid internal control system.
 
 5.  a) Based on the audit procedures applied by us and the information
 and explanations provided by the management, we are of the opinion that
 the transactions that need to be entered into the register maintained
 under section 301 have been so entered.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 and
 exceeding the value of Rs.  5 lacs in respect of any party during the
 year have been made at prices which are reasonable having regard to
 prevailing market prices at the relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us since the company has not accepted any deposits from public
 within the meaning of section 58-A, 58AA or any other provision of the
 Act, the question of compliance with the provisions of section 58A,
 58AA or any other provisions of the Act does not arise.
 
 7.  In our opinion the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  As informed to us, the Central Government has not prescribed the
 maintenance of Cost records under section 209(1)(d) of the Companies
 Act, 1956.
 
 9. a) According to the records of the company, the Company is generally
 regular in depositing with appropriate authorities undisputed statutory
 dues, including Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise
 Duty, Service Tax, Cess and other statutory dues applicable to it.
 
 According to information & explanation given there were no undisputed
 amounts payable in respect of income tax, wealth tax, service tax,
 sales tax, custom duty, excise duty, service tax cess & other statutory
 dues which remained outstanding as at 31st March, 2012 for a period
 more than six months from the date they became payable.
 
 b) The disputed statutory dues aggregating Rs. 2.57 Lacs that have not
 been deposited on account of disputed matters pending before
 appropriate authorities are as under:
 
 Name of Statute        Amount         Financial Year       Forum where
                     (Rs. in Lacs)     for which it 
                                        relates             dispute is
                                                            pending
 
 Income Tax Act, 1961    2.13           2004-05            ITAT, MUMBAI
 
 Income Tax Act, 1961    0.44           2006-07            ITAT, MUMBAI
 
 10.  The accumulated losses of the company are more than 50% of its net
 worth as at 31 March 2012. The company has incurred a cash loss of Rs
 52.75 lacs in the current financial year and Rs.58.13 lacs in the
 immediately preceding financial year.
 
 11.  According to the records of the company, the company has not
 borrowed from financial institutions or banks or issued any debentures
 during the year, Hence in our opinion, the question of reporting on
 defaults in repayment of dues to financial institutions or banks or
 debenture holders does not arise.
 
 12.  According to the information and explanation given to us the
 company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures or other securities.
 
 13.  In our opinion, and to the best of our information and according
 to the explanations provided by the management, we are of the opinion
 that the company is neither a Chit Fund nor a nidhi /mutual benefit
 society. Hence, in our opinion, the requirements of para 4 (xiii) of
 the Order do not apply to the company.
 
 14.  As per records of the company and information and explanations
 given to us by the management, company is not dealing or trading in
 shares, securities, and debentures and other investments.
 
 15.  The company has not given any guarantee in connection with loans
 taken by others from banks or financial institutions.
 
 16.  According to the records of the company, the Company has not taken
 any term loan.
 
 17.  According to the information and explanations given to us and, on
 an overall examination of the balance sheet of the company, we report
 that no funds raised on short-term basis have been used for long-term
 investment by the company.
 
 18.  According to the records of the company and the information and
 explanations provided by the management, the company has not made any
 preferential allotment of shares to parties and companies covered in
 the register maintained u/s.301 of the Act.
 
 19.  No debentures have been issued by the Company during the year and
 hence, the question of creating securities in respect thereof does not
 arise.
 
 20.  The company has not raised any money by public issues during the
 period covered by our audit report.
 
 21.  Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the Company has been noticed or reported during the course of our
 audit.
 
                                      For V. K. BESWAL & ASSOCIATES
                                              CHARTERED ACCOUNTANTS
                                               FIRM REGN NO 101083W
 
                                                     CA K.V. BESWAL
 
                                                            PARTNER
 
                                          Membership Number: 131054
 
 Place : Mumbai
 Dated : 13 August 2012