1.  We have audited the attached Balance Sheet of EASTCOAST STEEL
 LIMITED (the Company) as at 31st March 2012, the Statement of
 Profit and Loss and the 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.
 
 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 prepared are free of material misstatements. 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.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003
 (Order) issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 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.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 (a) We have obtained all the information & 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 accounts 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 the Cash flow
 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 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 representation received from the directors
 as on 31st March 2012, and taken on the record by the board of
 directors , we report that none of the directors are disqualified as at
 31s1 March, 2012 from being appointed as a director u/s 274 (1) (g) 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
 significant accounting policies and notes thereof give the information
 required by the Companies Act, in the manner so required and present 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 Statement of Profit and Loss , of the  Loss 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 RE : EASTCOAST STEEL LIMITED
 REFERRED IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE
 
 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 were physically verified by the management during
 the year. No material discrepancies were noticed during such
 verification.
 
 (c) The Company has not disposed off significant amount of fixed assets
 during the year and therefore do not affect the going concern status of
 the Company.
 
 2.  In respect of Inventory :
 
 The Company does not hold any physical inventories. Thus provision of
 clause (ii) of paragraph 4 of the Order is not applicable .
 
 3.  In respect of the loans, secured or unsecured, granted or taken by
 company to/from Companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act,1956: .
 
 (a) The Company has not given any loan during the year to companies,
 firms or other parties covered in the register maintained under section
 301 of the Companies Act, 1956. Consequently, the requirement of clause
 (iii) (b) (c) and clause (iii) (d) of the paragraph 4 of the Order are
 not applicable.
 
 (b) The Company has taken unsecured loan from a Company covered in the
 register maintained under section 301 of the Companies Act, 1956. In
 respect of the said loan, the maximum amount outstanding at any time
 during the year and the year end balance is Rs.2,25,40,313/-.
 
 (c) In our opinion and according to information and explanation given
 to us, the rate of interest and other terms and conditions of the loan
 taken by the Company, are not prima facie prejudicial to the interest
 of the Company.
 
 (d) The principal amounts are payable over the period of three to five
 years, where the interest is payable annually at the discretion of the
 company, However company has able to obtain waiver of interest for
 current and previous financial year.
 
 4.  The Company has not carried on any activities during the year.
 Hence in our opinion clause (iv) and (v) of the paragraph 4 of the
 Order are not applicable,
 
 5.  In our opinion and according to information and explanation given
 to us, the Company has not accepted any deposits from the public within
 the meaning of Section 58A & 58AA of the Companies Act, 1956 and the
 Companies (Acceptance of Deposit) Rules, 1975.
 
 6.  The Company does not have a formal internal audit system,
 Management does not think necessary, establishing an internal audit
 system in view of suspension of production.  However, according to
 information and explanation given to us, its internal control systems
 provide reasonable internal checking of its financial transactions.
 
 7.  The Company has not carried on any manufacturing operation during
 the year. Hence the question of cost record required to be maintained
 under section 209 (1) (d) of Companies Act, 1956 does not arise.
 
 8.  In case of Statutory dues:
 
 (a) According to the records of the Company, the Company is regular in
 depositing with appropriate authorities undisputed statutory dues
 including provident fund, employees'' state insurance, income-tax,
 sales tax, customs duty, and other statutory dues applicable to it.
 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, 2012 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 statutory dues outstanding on account of disputes.
 
 9.  The accumulated loss of the Company at close of the year is more
 than fifty percent of its net worth. The Company has incurred cash
 losses during the financial year covered by our audit and in the
 immediately preceding financial year.
 
 10.  The Company has not borrowed any money by way of loan from
 financial Institutions, banks and debenture holders; hence there is no
 question of repayments of dues or default on this account.
 
 11.  The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 12.  In our opinion, the Company is not a chit fund or a nidhi / mutual
 benefit fund / society.  Therefore, the provisions of clause (xiii) of
 paragraph 4 of the Order are not applicable.
 
 13.  The Company is not dealing or trading in shares, securities,
 debentures and other investments. Therefore, the provisions of clause
 (xiv) of paragraph 4 of the Order are not applicable.
 
 14.  According to information and explanation given to us the Company
 has not given any guarantee for loans taken by others from bank or
 financial institutions. Therefore, the provisions of clause (xv) of
 paragraph 4 of the Order are not applicable.
 
 15.  The Company has not taken any term loans during the year.
 Therefore, the provision of clause (xvi) of paragraph 4 of the order
 are not applicable.
 
 16.  According to the information and explanation given to us and on an
 overall examination of the Balance Sheet of the Company, the funds
 raised on short-term basis have not been used for long-term investment.
 
 17.  The Company has not made any preferential allotment of shares to
 any party listed in the register maintained under Section 301 of the
 Companies Act, 1956.
 
 18.  The Company has not issued any secured debentures during the year
 covered by our audit.
 
 19.  The Company has not raised any money by way of public issue during
 the year.
 
 20.  According to information and explanation given to us, no fraud on
 or by the Company has been noticed or reported during the year.
 
                                              For Chaturvedi and Shah
  
                                       Firm Registration No. 101720 W
 
                                                Chartered Accountants 
 
                                                                 Sd/-
 
                                                      Amit Chaturvedi
 
 Place : Mumbai                                               Partner
 
 Date : 1st December, 2012                       Membership No.103141