We have audited the attached Balance Sheet of KAMDHENU ISPAT LIMITED as
 at 31st March, 2012 and the Statement of 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
 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 (Auditors 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, to the extent
 applicable.
 
 3 Further to our comments in the annexure 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 Statement of Profit and Loss and cash flow
 statement dealt with by this report are in agreement with the books of
 accounts;
 
 (d) In our opinion the Balance Sheet, statement of Profit & Loss 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, 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 (I) of section 274 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
 ''Significant Accounting Policies and Notes to Accounts 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, 2012 ;
 
 (ii) In the case of the Statement of Profit & Loss of the Profit of the
 Company for the year ending on 31st March, 2012 ; 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. 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 periodical manner, 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 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 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 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 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 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. We have broadly reviewed the cost records maintained by the Company
 pursuant to the Companies (Cost Accounting Records) Rules, 2011,
 prescribed by the Central Government under section 209(1)(d) of the
 Companies Act, 1956 and are of the opinion that prima facie that
 prescribed cost records are general and not in precise manner for the
 product of the Company. We have however not made a detailed examination
 of the cost records with a view to determine whether they are accurate
 or complete.
 
 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, 2012 for a period of more than six months from the date of
 becoming payable.
 
 b. The disputed statutory dues aggregating to Rs. 469.58 Lacs, (Gross
 demand of Rs. 1032.83 Lacs less deposit under protest of Rs. 563.25
 Lacs) have not been deposited on account of disputed matters pending
 before appropriate authorities as per details given under :- 
 
 Name of the   Nature of      Period to which   Amount    Forum where 
                                                          Dispute is
                                                          pending  
 Statute       the Dues       the amount
                              relates          (Rs.in 
                                                Lacs)
 
 Income Tax  
 Act           Income Tax     F.Y. 2001-02,
                              2003-04, 2004-05,   360.95  C I T (Appeals)
                              2005-06, 2006-07            Alwar & Jaipur
                              2007-08, 2008-09            Rajasthan
                              2009-10
 
 Central 
 Excise        Excise Duty &  F. Y. 1998-99,              CESTAT, High 
                                                          Court of
                                                          Rajasthan,
 Act & Finance 
 Act           Service tax    2004-05, 2006-07,   286.93  Ad.
                                                          Commissioner 
                                                          Central Excise,
                              2007-08, 2008-09            Asst. Comm. 
                                                          Of Service
                                                          Tax, Joint
                              2009-10, 2010-11            Commissioner of
                                                          Central Excise
 
 Central 
 Sales                        F. Y. 1998-99,              Dy. Comm.
                                                         (Appeal), 
                                                          Rajasthan Tax
 Tax Act and   Sales Tax      1999-00, 2000-01,   384.95  Board, Joint
                                                          Commissioner 
                                                         (Appeal)
 Sales Tax
 Act of                       2001-02, 2002-03,
 various State                2003-04, 2004-05,
                              2005-06, 2006-07, 
                              2007-08, 2008-09
 
 
 
 10. The Company has no accumulated Losses at the end of the financial
 year. The Company 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 other securities.
 
 13. In our opinion, the company is not a chit fund or a nidhi /mutual
 benefit fund/ society. Therefore the provision of clause (xiii) of
 paragraph 4 of the order are not applicable to the Company.
 
 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 financial institutions.
 
 16. According to the information and explanation given to us, and
 record examined by us the term loans have been applied for the purpose
 for which they were raised.
 
 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 preferential
 allotment of shares to parties & companies covered in the register
 maintained under section 301 of the Companies Act,1956 & price at which
 shares have been issued is not prejudical to the interest of the
 Company.
 
 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 year.
 
 
                                                 For S.SINGHAL & CO
 
                                              Chartered Accountants 
 
                                                    (Reg No.001526C)
 
 Date: 30.05.2012
 
 Place: Gurgaon                                          (R.K.Gupta)
 
                                                            PARTNER
 
                                                        M.No 073846