1.  We have audited the attached Balance Sheet of Gujarat NRE Coke
 Limited as at March 31, 2011 and the Profit and Loss Account and the
 Cash Flow Statement of the Company 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.
 
 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 (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
 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 of books and records of the company as we considered appropriate
 and according to the information and explanations given to us , we
 enclose in the Annexure a statement on the matters specified in
 paragraphs 4 and 5 of the said Order to the extent applicable.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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
 those 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 to the extent applicable;
 
 (e) On the basis of written representations received from the directors
 as on 31st March, 2011, and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as at March 31,
 2011 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 together with the
 significant accounting policies in schedule 18 and notes appearing
 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 March 31, 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 Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date to the
 members of Gujarat NRE Coke Ltd. for the year ended 31st March 2011.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) We were informed that the Company has a phased program of physical
 verification of its fixed assets which, in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 In accordance with this program, fixed assets required to be verified
 were physically verified by management during the period under review
 and no material discrepancies were noticed on such verification.
 
 (c) Fixed assets disposed off during the year under review were not
 substantial and therefore do not affect the going concern status of the
 company.
 
 (ii) (a) During the year inventories have been physically verified by
 the management at reasonable intervals.  In our opinion, the frequency
 of verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, 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.
 
 (c) The Company is maintaining proper records of inventory.  The
 discrepancies noticed during the physical verification of inventories
 as compared to book records were not material and have been properly
 dealt with in the books of account.
 
 (iii) In our opinion and according to the information and explanations
 given to us, the company has not granted or taken loans, Secured or
 Unsecured, to/from the companies, firm or other parties covered in the
 Register maintained under section 301 of the Companies Act, 1956
 consequently clause 4 (iii) of the order is not applicable to the
 company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there exists an adequate internal control system
 commensurate with the size of the company and the nature of its
 business with regard to purchases of inventory and fixed assets and
 with regard to the sale of goods and services. No major weakness in
 internal control system was observed.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that particulars of all the transaction made in
 pursuance of the 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.
 
 (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 of
 the Companies Act, 1956 and exceeding value of rupees five 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.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public
 and consequently, the directives issued by the Reserve Bank of India
 and the provisions of Section 58A, 58AA or any other relevant
 provisions of the Companies Act, 1956 and the rules framed there under
 are not applicable to the Company.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and the nature of its business.
 
 (viii) The Central Government has not prescribed rules for maintenance
 of cost records under Section 209(1) (d) of the Companies Act, 1956 for
 Metallurgical coke business. The cost records are maintained for steel
 plants as per rules. We have broadly reviewed the accounts and records
 of the steel plant in this connection and are of the opinion that prima
 facie the prescribed accounts and records have been made and
 maintained. We have not, however, carried out a detailed examination of
 such records.
 
 (ix) (a) According to the information and explanations given to us and
 on the basis of our examination of the books of account, in our
 opinion, the Company has been 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, Customs Duty, Excise Duty, Cess and any other
 material statutory dues with appropriate authorities during the year
 under review.
 
 The Central Government has not prescribed the amount of cess for
 Rehabilitation Revival fund payable under section 441 A of the
 Companies act, 1956.
 
 (b) According to the information and explanations given to us, no
 undisputed amount payable in respect of Income Tax, Sales Tax, wealth
 Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st
 March, 2011, for a period of more than six months from the date they
 became payable.
 
 (c) According to the information and explanations given to us and the
 records of the company examined by us, there were no dues in respect of
 Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
 Duty and Cess that have not been deposited with the appropriate
 authorities on account of any dispute other than those as mentioned
 here-in-below:
 
 Name of the 
 statute       Nature of   Amount    Period to which 
                                           the        Forum where
               Dues       (Rs./
                          Crores)    amount Relates   disputes are 
                                                      pending
 
 Income Tax 
 Act, 1961     Regular 
               Assessment   3.52         2005-06      Income Tax 
                                                      Appellate Tribunal
                                                      Kolkata
 
  -Do-           -Do-       0.57         2006-07      Commissioner of
                                                      Income Tax
                                                      (Appeals), Kolkata
 
 -Do-            -Do-       0.33         2007-08      Commissioner of 
                                                      Income
                                                      Tax (Appeals), 
                                                      Kolkata
 
 Finance 
 Act, 1994     Service 
               Tax          0.06     Oct''07-Mar''08    Custom, Excise and
                                                      Service Tax
 (Act 32 of 
 1994)                                                Appellate Tribunal
                                                      Ahmedabad
 
 (x) The Company does not have accumulated losses at the year ended 31st
 March, 2011 and has not incurred cash losses during the year under
 review and in the immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to its
 banks or to any financial institutions or debenture holders.
 
 (xii) According to the explanations given to us and based on the
 information available, the Company has not granted loans and advances
 on the basis of security by way of pledge of shares, debentures and
 other securities.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund / nidhi / mutual benefit
 fund / society.
 
 (xiv) According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments. The investments have been held by the company in its
 own name except to the extent of exemption granted under section 49 of
 the Companies Act, 1956
 
 (xv) In our opinion and according to the information and explanations
 given to us, the terms and conditions, on the basis of which the
 Company has given guarantees for loans taken by the subsidiary
 companies from banks or financial institutions, are not as such prima
 facie prejudicial to the interests of the Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us and on the basis of our examination of the books of
 account, the term loans were applied for the purpose for which such
 loans were obtained.
 
 (xvii) 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.
 
 (xviii) The Company had allotted shares consequent upon conversion of
 warrants allotted on preferential basis to a company covered in
 Register maintained under Section 301 of the Companies Act, 1956 during
 the year. The Price at which these shares have been issued has been
 determined as per Securities and Exchange Board of India (Disclosure
 and Investor Protection) Guidelines 2000, which in our opinion is not
 prejudicial to the interest of the Company.
 
 (xix) According to the information and explanations given to us, the
 company issued secured non-convertible debentures during the year
 (Refer note no. B- 4 (a) of schedule 18)
 
 (xx) The company has not raised any money by public issues during the
 year under review.
 
 (xxi) 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 N.C.Banerjee & Co.
 
                                               Chartered Accountants
 
                                 ( Firm''s Registration No. : 302081E)
 
 
                                                             A. Paul
 
 Place : Kolkata                                            (Partner)
 
 Dated : 15th July, 2011                        Membership No. 06490