1) We have audited the attached balance sheet of Gandhi Special Tubes
 Limited as at 31st March, 2011, the profit and 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 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.
 
 3) As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 Section 227 of the Companies Act, 1956 and on the basis of such checks
 as we considered appropriate and according to the information and
 explanations given to us during the course of audit, we enclose in the
 Annexure a statement on the matters specified in paragraphs 4 & 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 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 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 account;
 
 d) in our opinion, the balance sheet, profit and loss account and 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 the directors
 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 director of the Company 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 together with
 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 the balance sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 ii) in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 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
 Statement referred to in paragraph 3 of our report of even date on the
 accounts of Gandhi Special Tubes Limited for the year ended on 31st
 March, 2011.
 
 (i) (1) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (2) As explained to us, the fixed assets have been physically verified
 by the management in accordance with the phased programme of
 verification, which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (ii) (1) The inventories have been physically verified during the year
 by the management. In our opinion, the frequency of verification is
 reasonable.
 
 (2) In our opinion, 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.
 
 (3) The Company has maintained proper records of inventories and the
 discrepancies noticed on physical verification of the inventories as
 compared to book records were not material.
 
 (iii) (1) According to the information and explanations given to us,
 the Company has, during the year, not granted any loans, secured or
 unsecured, to companies, firms or other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956. Accordingly,
 paragraphs 4 (iii) (a), (b), (c) and (d) of the Order are not
 applicable.
 
 (2) According to the information and explanations given to us, the
 Company has, during the year, not taken any loans, secured or
 unsecured, from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956.
 Accordingly, paragraphs 4 (iii) (e), (f) and (g) of the Order are not
 applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business, with
 regard to the purchases of inventories, fixed assets and for sale of
 goods and services. Further, on the basis of our examination and
 according to the information and explanations given to us, we have
 neither come across nor have any information of any instances of major
 weaknesses in the aforesaid internal control system.
 
 (v) (1) 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 have been entered in the register required to
 be maintained under that section; and
 
 (2) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of Rs.500,000/- in
 respect of each party during the year, have been made at prices which
 are reasonable having regard to prevailing market prices, except for
 items of specialized nature, where a question of comparison does not
 arise.
 
 (vi) The Company has not accepted any deposits from the public.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the rules made by the
 Central Government, the maintenance of cost records have been
 prescribed under Section 209 (1) (d) of the Companies Act, 1956 and 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 records with a view to determine whether they are
 accurate or complete.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing undisputed statutory dues including
 Provident Fund, Investor Education & 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) According to the information and explanation given to us and the
 records of the Company examined by us, there are no dues of custom
 duty, income tax, wealth tax, service tax and cess which have not been
 deposited on account of any dispute. The particulars of excise duty and
 sales tax as at 31st March 2011 which have not been deposited on
 account of dispute are as follows
 
 Name of the Statute    Nature of Dues   Amount under      Period to
                                         dispute not yet   which the
                                         Deposited         amount
                                         (Rs. in lacs)     relates
 
 Central Excise Laws    Excise Duty      8.14              2008-2009
 
                        Service Tax      0.77              2009-2010
 
 Sales Tax Laws         Sales Tax       25.23              2002-2003
 
 Name of the Statue  Forum where the dispute is pending
 
 Central Excise Laws Before Excise Superintendent
 
                     Before Asst.  Commissioner
 
 Sales Tax Laws      Before Comm. of Sales Tax
 
 (x) The Company has no accumulated losses at the end of the financial
 year and has not incurred cash losses in the financial year under
 report and in the immediately preceding financial year.
 
 (xi) The Company has not defaulted in repayment of its dues to bank.
 The Company has not issued any debentures.
 
 (xii) Based on our examination of the records and the information and
 explanations given to us, the Company has not granted any loans and
 advances on the basis of securities by way of pledge of shares,
 debentures and other securities.
 
 (xiii) In our opinion, the provisions of any special Statute applicable
 to Chit Fund, Nidhi or Mutual Benefits Fund/Societies are not
 applicable to the Company.
 
 (xiv) The Company is not dealing or trading in shares, securities,
 debentures or other investments and hence requirements of Para 4 (xiv)
 are not applicable to the Company.
 
 (xv) According to information and explanation given to us, the Company
 has not given any guarantee for loans taken by others from banks or
 financial institutions.
 
 (xvi) The Company has not raised any term loan during the year.
 
 (xvii) The Company has not raised any funds during the year on
 short-term basis and hence question of use of such funds for long-term
 investment does not arise.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties and companies covered in the register maintained U/s 301 of
 the Companies Act, 1956.
 
 (xix) The Company has not issued any debentures and hence, question of
 creating security or charge in respect thereof does notarise.
 
 (xx) The Company has not raised any money by public issues during the
 year.
 
 (xxi) Based upon the audit procedures performed 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.
 
 
 
                                                   For S. V. DOSHI & CO.
                                                   Chartered Accountants
 
                                                             SUNIL DOSHI
                                                                 Partner 
                                                   Membership No.: 35037 
                                                  Firm Reg. No.: 102752W
 
 Mumbai, 12 May 2011