1.  We have audited the attached Balance Sheet of JINDAL STEEL & POWER
 LIMITED, as at 31st March, 2012, the Statement of Profit & Loss 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.
 
 2.  We conducted our audit in accordance with the 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 the 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 as
 amended by the Companies (Auditors'' Report) (Amendment) Order 2004
 (Collectively the Order), issued by the Central Government of India in
 terms of section 227 (4A) 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, 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:
 
 (i) 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;
 
 (ii) 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;
 
 (iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) In our opinion and read with sub note (a) of Note 4 regarding
 accounting for sales tax included in sales price of products sold out
 of sales tax exempted unit under Sales Tax Subsidy / Capital Reserve
 account in the circumstances as explained in the Note, the Balance
 Sheet, Statement of Profit & Loss 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;
 
 (v) On the basis of written representations received from the
 Directors, as on 31st March, 2012 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;
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the
 Accounting Policies and 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:
 
 (a) in the case of Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012;
 
 (b) in the case of Statement of the Profit & Loss of the Profit for the
 year ended on that date; and
 
 (c) in the case of Cash Flow statement, of the Cash Flows for the year
 ended on that date.
 
 Annexure Re: Jindal Steel & Power Limited Referred to in paragraph 3 of
 our report of even date
 
 1.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a phased programme 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. As part of this
 programme, the management has physically verified certain fixed assets
 during the year. Discrepancies noticed on such verification as compared
 to book records were not material and have been properly adjusted in
 the books of account.
 
 (c) Fixed assets disposed off during the year were not substantial.
 
 2.  (a) As explained to us, physical verification has been conducted by
 the management at reasonable intervals in respect of finished goods,
 stores and spare parts and raw materials. Further, stocks in the
 possession and custody of third parties and stock in transit as at 31st
 March, 2012 have been verified by the management with reference to
 confirmation or statement of account or correspondence with the third
 parties or subsequent receipts of goods.  In our opinion, the frequency
 of such verification is reasonable.
 
 (b) The procedures for the physical verification of inventories
 followed by the management are, in our opinion, reasonable and adequate
 in relation to the size of the Company and the nature of its business.
 
 (c) In our opinion, the Company is maintaining proper records of
 inventory. The discrepancies noticed on physical verification of
 inventory as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 3.  (a) The Company has not granted any loans, secured or unsecured, to
 companies, firms or other parties listed in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (b) Since there are no such loans, comments regarding terms &
 conditions, repayment of the principal amount, interest due thereon and
 overdue amounts are not required.
 
 (c) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties listed in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (d) Since there are no such loans, comments regarding terms &
 conditions, repayment of the principal amount, interest due thereon and
 overdue amounts are not required.
 
 4.  In our opinion and according to the information & explanations
 given to us during the course of audit, there are adequate internal
 control systems commensurate with the size of the Company and the
 nature of its business with regard to purchase of inventories and fixed
 assets and for the sale of goods and services. Further, on the basis of
 our examination of the books and records of the Company, carried out in
 accordance with the generally accepted auditing practices in India, we
 have neither come across nor have we been informed of any instance of a
 major weakness in the aforesaid internal control systems.
 
 5.  (a) To the best of our knowledge and according to the information
 and explanations given to us, we are of the opinion that the
 particulars of contracts or arrangements that need to be entered into
 the register maintained under section 301 of the Companies Act, 1956
 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions entered into in pursuance of contracts or
 arrangements, with whom transactions exceeding the value of Rs. Five lacs
 in respect of each party have taken place during the financial year,
 are at prices which are reasonable having regard to the prevailing
 market prices at the relevant time where such market prices are
 available.
 
 6.  In respect of fixed deposits accepted from the public, the
 provisions of section 58A and 58AA or any other relevant provisions of
 the Companies Act, 1956 including the Companies (Acceptance of
 Deposits) Rules, 1975 have been complied with. We have been informed
 that no Order has been passed by the Company Law Board or National
 Company Law Tribunal or RBI or any Court or any other Tribunal in this
 regard.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the cost accounting records maintained by
 the Company pursuant to the companies (Cost Accounting Records) Rules,
 2011 prescribed by the Central Government under section 209 (l)(d) of
 the Companies Act, 1956 and are of the opinion that, prima facie, the
 prescribed records have been made & maintained. We are however, not
 required to carry out a detailed examination of the same.
 
 9.  (a) In our opinion and according to the information and
 explanations given to us and according to the records of the Company,
 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, wherever applicable, have been
 regularly deposited with the appropriate authorities during the year
 and there are no such undisputed statutory dues payable for a period of
 more than six months from the date they became payable as at 31st
 March, 2012.
 
 (b) According to the information and explanations given to us and as
 per the books and records examined by us, there are no dues of Custom
 duty and Wealth tax which have not been deposited on account of any
 dispute, except the following in respect of disputed Excise duty, Sales
 tax, Service tax, Cess, Entry tax, Income tax and the forum where
 dispute is pending:
 
 Name of the Statute        Nature of dues           Amount
                                                    (Rs. in Crore)
 
 Central Excise and Salt    Excise Duty               1.55
 Act, 1944                                            0.70
 
                                                     92.41
                                                      2.54
                                                      0.10
 
 Central Sales Tax Act/     Entry Tax                45.93
 Local Sales Tax Act/
 
 Entry Tax                  Entry Tax                 0.15
 
 Central SalesTax Act/      State Sales Tax/Value     0.20
 Local Sales Tax Act/Entry  added tax
 Tax                                                  0.60
 
 Central Sales Tax Act/     Central Sales Tax         0.44
 Local SalesTax Act/Entry                             0.72   
 Tax                                                  0.26
 
 Chhattisgarh State Govt.   Energy Development      136.75
 Law                        Cess
 
 Business & Other           Cess                      2.28
 Construction Workers
 Welfare Cess Act, 1996
 
 Income Tax Act, 1961       Income Tax              186.56
                                                      1.20
 
 
 
 Name of the Staatue         Forum where dispute 
                              is pending               Amount deposited
                                                         (Rs. in Crore)
 
 Central Excise and Salt
 Act, 1944                 Chhattisgarh High Court, 
                           Bilaspur                           1.00
 
                           Appellate Commissioner, Raipur      NIL
 
                           CESTAT, New Delhi                  0.47
 
                           Chhattisgarh High Court, Bilaspur   NIL
 
                           Madhya Pradesh High Court,          NIL
                           Jabalpur
 
 Central Sales Tax Act/
 Local SalesTax Act/
 Entry Tax                 Deputy Commissioner, Commercial   14.36
                           Tax (Appeals), Rourkela
 
                           Additional Commissioner,           0.02
                           Commercial tax (Appeals), Cuttack
 
 Central SalesTax Act/
 Local Sales Tax Act/Entry
 Tax                       Deputy Commissioner, Commercial    0.04
                           Tax (Appeals), Cuttack
 
                           Additional Commissioner,           0.09
                           Commercial Tax (Appeals), Cuttack
 
 Central Sales Tax Act/
 Local Sales Tax Act/Entry
 Tax                       Orissa High Court, Cuttack         0.44
 
                           Deputy Commissioner, Commercial    0.29
                           Tax, Cuttack
 
                           Deputy Commissioner, Commercial    0.13
                           Tax(Appeals), Rourkela
 
 Chhattisgarh State Govt.
 Law                       Honorable Supreme Court            NIL
 
 Business & Other
 Construction Workers
 Welfare Cess Act, 1996    Orissa High Court, Cuttack         0.05
 
 Income Tax Act, 1961      Income Tax Appellate Tribunal,     1.22
                           New Delhi
 
                           Commissioner of Income Tax         0.64
                           (Appeals), Rohtak
 
 10.  The Company does not have accumulated losses as at the end of the
 financial year. There are no cash losses during the financial year and
 in the immediately preceding financial year.
 
 11.  According to the information and explanations given to us and as
 per the books and records examined by us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders.
 
 12.  According to the information and explanations 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.
 
 13.  The Company does not fall within the category of Chit fund / Nidhi
 / Mutual Benefit fund / Society and hence the related reporting
 requirements of the Order are not applicable.
 
 14.  According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments and hence the related reporting requirements of the
 Order are not applicable.
 
 15.  The Company has given guarantees against loans taken by others
 from banks and financial institutions; the terms and conditions of such
 guarantees are not, prima facie, prejudicial to the interest of the
 Company.
 
 16.  In our opinion and according to the information and explanations
 given to us, the term loans raised during the year by the Company have
 been applied for the purpose for which the said loans were obtained,
 where the lenders have stipulated such end use.
 
 17 According to the information and explanations given to us and as per
 the books and records examined by us, on an overall examination of the
 Balance Sheet of the Company, the funds raised by the Company on
 short-term basis have not been applied for long-term investment.
 
 18 The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 19.  According to the information and explanations given to us and on
 the basis of the records examined by us, the Company has created
 necessary securities for the debentures issued in earlier years.
 
 20.  The Company has not raised any money by way of public issue during
 the years.
 
 21.  During the course of our examination of the books and records of
 the Company carried out in accordance with the generally accepted
 auditing practices in India, we have neither come across any instance
 of fraud on or by the Company, noticed and reported during the year,
 nor have we been informed of such case by the management.
 
                                    For S. S. KOTHARI MEHTA & CO.
 
                                           Chartered Accountants
                                                 FRN No. 000756N
 
                                                (Arun K. Tulsian)
 Place: New Delhi                                        Partner
 
 Dated: 27th April, 2012                    Membership No. 89907