Kamdhenu Ispat

We have audited the attached Balance Sheet of KAMDHENU ISPAT LIMITED as
 at 31st March, 2009 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 Companys
 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
 finanoal 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 pnnciples 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 (Auditors Report) (Amendment) Order.2004
 issued by the Central Govt, 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, to the extent
 applicable,
 
 3 Further to our comments in the annexure referred to m 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 except documents detained by the Income Tax and DGCEI Authorities
 for which we have relied on the allied available records.
 
 (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, 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 CompaniesAct., l956,totheextentapplicable;
 
 (e) On the basis of written representation received from the Directors
 as on 31 st March, 2009 and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31 st March,
 2009 from being appointed as a Directorintermsofsection274(IXg)of the
 CompaniesAct, 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 23 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) Inthecaseofthe Balance Sheet of the State of
 AffairsoftheCompanyasat3lstMarch,2009;
 
 (ii) In thecaseofthe Profit&Loss Account of the Profit of the Company
 for the year ending on 31st March. 2009; and
 
 (iii) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 
 ANNEXURE TO AUDITORS REPORT
 
 Referred to in paragraph 2 of our report of even date
 
 1.  In respect of its Fixed Assets
 
 a.  The company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets on the
 basis of available i nfbrmation.
 
 b.  According to the information S 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
 discrepances were nobced on such verification.
 
 c.  In our opinion, the Company has not disposed off a substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 2.  Inrespect of its lnventory
 
 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 inventory
 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 inventories. As
 explained to us, there was no materia! discrepancies noticed on
 physical verification of inventory as compared to the book records.
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 company toArom companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956:
 
 a.  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.
 
 b.  Because the company has not given or taken any loan to/from the
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956 hence sub clause
 b.cd.e.f.g of clause (iii) of paragraph of 4 of CARO (amendment 2004)
 are not applicable.
 
 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.  ln respect of transactions covered under Section 30l of the Company
 Act, 1956.
 
 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 Ad, 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 any party during the year have been made at prices which
 are reasonable having regard to the prevailing 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 withm the
 meaning of Section 58A and 58AA or any other relevant provisions of the
 Companies Act, 1956 and the Rules framed thereunder.
 
 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( I Xd) of the Companies Act, 1956 for the product of
 the Company. We have, however, not made adetailed examination of the
 records.
 
 9.  In respect of Statutory dues:
 
 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
 appropnate authorities. According to the information and explanation
 given to us, no undisputed amount payable in respect of the aforesaid
 dues were outstanding as at 31 st March,2009 for a penod of more than
 s