We have audited the attached Balance Sheet of KAMDHENU ISPAT LIMITED as
 at 31st March, 2011 and 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.
 
 1 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.
 
 2 As required by Companies (Auditor''s Report) (Amendment) Order, 2004
 issued by the Central Government of India in terms of section 227 (4A)
 of the Companies Act, 1956, We annex hereto a statement on the matters
 specified in paragraphs 4 & 5 of the said order.
 
 3 Further to our comments in the annexe referred to in paragraph 2
 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 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 and Profit and Loss Account and cash flow
 statement dealt with by this report are in agreement with the books of
 accounts;
 
 (d) In our opinion the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report have been prepared in
 compliance with the Accounting Standards referred to in subsection (3C)
 of Section 211 of the Companies Act, 1956.
 
 (e) On the basis of written representation 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 on 31st March, 2011 from being appointed as a Director
 in terms of section 274(1)(g) of the Companies Act,1956;
 
 (f) In our opinion and to the best of our information and according to
 the explanation given to us, the said accounts read together with the
 Schedule 22 of “Significant Accounting Policies and Notes to Accounts,
 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 & Loss Account of the Profit of the
 Company for the year ending on 31st March,2011; and
 
 (iii) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to Auditor''s Report
 Referred to in paragraph 2 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 on the basis of available information.
 
 b.  According to the information & explanation given to us, the fixed
 assets has been physically verified by the management during the year
 in a phased programme which in our opinion, is reasonable having regard
 to the size of the company and the nature of the assets. No material
 discrepancies were noticed on such verification.
 
 c.  In our opinion, the Company has not disposed off a substantial part
 of its fixed assets except replacement by discarding of old and unused
 plant & machinery during the year and the going concern status of the
 Company is not affected.
 
 2.  a.  As explained to us, inventories have been physically verified
 by the management at reasonable intervals during the year.
 
 b.  In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventor
 followed by the management are reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 c.  In our opinion and according to information & explanation given to
 us, The Company has maintained proper records of inventors. As
 explained to us, there was no material discrepancies noticed on
 physical verification of inventory as compared to the book records.
 
 3.  The company has neither granted nor taken any loans, secured or
 unsecured to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act,1956.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal control
 system.
 
 5.  a.  In our opinion and 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 that need to be
 entered in the register, maintained under the said section have been so
 entered.
 
 b. In our opinion and according to the information and explanation
 given to us, the transactions exceeding the value of Rupees five lacs
 in respect of each party during the year have been made at prices which
 are reasonable having regard to the prevail market prices at the
 relevant time, where such prices are available.
 
 6.  In our opinion and according to the information & explanation given
 to us, the company has not accepted deposits from public within the
 meaning of Section 58A and 58AA or any other relevant provisions of the
 Companies Act,1956 and the Rules framed there under.
 
 7.  In our opinion and according to the information and explanation
 given to us, the Company has an internal Audit system commensurate with
 the size and nature of its business.
 
 8.  In our opinion the cost records maintained by the company are
 general and not in precise manner as prescribed by the Central
 Government U/s 209(1)(d) of the Companies Act,1956 for the product of
 the Compan. We have however not made a detailed examination of the
 records.
 
 9.  a.  According to the records of the Company, undisputed statutory
 dues including Provident Fund, Employee State Insurance, Income Tax,
 Sales tax, Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and
 other statutory dues have been generally regularly deposited with the
 appropriate authorities except for delays in some cases. According to
 the information and explanation given to us, no undisputed amount
 payable in respect of the aforesaid dues were outstanding, as at 31st
 March,2011 for a period of more than six months from the date of
 becoming payable.
 
 b.  The disputed statutory dues aggregating to Rs.616.56 Lacs (Gross
 demand of Rs.1005.57 Lacs less deposit under protest of Rs.389.01 Lacs)
 have not been deposited on account of disputed matters pending before
 appropriate authorities as per details given below:
 
 Name of 
 the Statute    Nature of
                 the Dues    Period to 
                             which the    Amount       Forum where
                                        (Rs.in Lacs)   Dispute is pending 
                             amount
                             relates
 
 
 
 Income Tax Act Income Tax 
                Matters     A.Y.2001-02,
 
                            2003-04,
                            2004-05
 
                            2005-06,
                            2006-07,     359.07        CIT ( Appeals) 
                                                       Alwar &
                            2007-08,
                            2008-09,                   Jaipur, Rajasthan
                            2009-10
 
 Central 
 Excise Act     Excise 
                Duty &      F.Y. 
                            1998-99,                   CESTAT, High 
                                                       Court of 
                                                       Rajasthan,
 & Finance Act  Service tax 2004-05, 
                            2006-07,    279.97         Adl. Commissionar
                                                       Central Excise,
                            2007-08, 
                            2008-09                    Asst. Comm. Of 
                                                       Service Tax, Joint
                                                       Commissioner of 
                                                       Central Excise
 
 Central Sales 
 Tax Act                    F.Y. 
                            1998-99,
 and Sales 
 Tax Act of     Sales Tax   1999-00, 
                            2000-01,                   Dy. Comm(Appeal),
                                                       Rajasthan Tax
 various 
 States                     2001-02, 
                            2002-03,    366.53         Board, Joint
 
                            2003-04, 
                            2004-05                    Commissioner
                                                        (Appeal)
                            2005-06, 
                            2006-07,
 
                            2007-08, 
                            2008-09
 
 10.  The Company has no accumulated Losses and has not incurred any
 cash losses during the financial year covered by our audit or in the
 immediately preceding financial year.
 
 11.  Based on our audit procedure and according to the information and
 explanations given to us, we are of the opinion that the company has
 not defaulted in repayment of dues to financial institution or banks.
 The company has not issued any debenture.
 
 12.  In our opinion and according to the explanations given to us and
 based on the information available, no loans and advances have been
 granted by the company on the basis of security by way of pledge of
 shares, debentures and
 
 13.  In our opinion, the company is not a chit fund or a nidhi /mutual
 benefit fund/ society.
 
 14.  The company is not dealing or trading in shares, securities,
 debentures and other investments as business.
 
 15.  According to the information and explanation given to us, the
 company has not given any guarantee for loans taken by others from
 banks or fnancial institutions.
 
 16.  According to the information and explanation given to us, and
 record examined by us the term loans have been applied for the
 
 17.  According to the information and explanation given to us and an
 overall examination of the balance sheet of the company we are of the
 opinion that there no funds raised on short term basis that have been
 used for long term investment.
 
 18.  According to the information and explanations given to us and in
 our opinion during the year the company has not made any preferential
 allotment of shares to parties & companies covered in the register
 maintained under section 301 of the Companies Act,1956.
 
 19.  No debentures has been issued by the company during the year.
 
 20.  The Company has not raised any monies by way of Public Issues
 during the year.
 
 21.  According to the information and explanation given to us, no fraud
 on or by the company has been noticed and reported during the
 
                                                     For S.SINGHAL & CO.
 
                                                  Chartered accountants
 
 Dated: 30.05.2011                                     (Reg No.001526C)
 
 Place : Gurgaon                                            (R.K.Gupta)
 
                                                   PARTNER M.No. 073846