We have audited the accompanying financial statements of Lloyds Steel
 Industries Limited, which comprise the Balance sheet as at March 31,
 2012 and the Statement of Profit and Loss and Cash Flow statement for
 the period ended then, and a summary of Significant Accounting Policies
 and other explanatory information.  
 
 Management''s Responsibility for the Financial Statements Management 
 is responsible for the preparation of these financial statements that 
 give a true and fair view of the financial position, financial 
 performance and Cash flows of the company in accordance with the 
 accounting principles generally accepted in India, including accounting 
 standards referred to in sub section (3C) of section 211 of the 
 Companies Act. 1956.
 
 This responsibility includes the design, implementation and maintenance
 of internal control relevant to the preparation and presentation of the
 financial statements that give a true and fair view and are free from
 material misstatement, whether due to fraud or error.
 
 Auditor''s Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the auditing standards issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and 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.
 
 As required by the Companies (Auditors'' Report) Order, 2003. as amended
 by Companies (Auditors'' Report) (Amendment) 2004 (together ''the
 order'') issued by the Central Government of India in terms of Section
 227(4A) of the Companies Act, 1956, of India (the Act) and on the basis
 of such checks as we considered appropriate, and according to the
 information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order to the extent applicable to the Company.
 
 Opinion
 
 (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 have been prepared in
 compliance with the applicable accounting standards referred to in
 Section 211 (3C) of the Act:
 
 (e) On the basis of the written representations received from the
 Directors and taken on record by the Board of Directors of the Company,
 none of the Directors is disqualified as on March 31,2012 from being 
 appointed as a Director in terms of clause (g) of sub-section (1) of 
 Section 274 of the Act;
 
 (f) In view of the foregoing paragraphs, in our opinion and to the best
 of our information and according to the explanations given to us. the
 Balance Sheet. Profit and Loss Account and Cash flow together with the
 Notes thereon and attached thereto, give in the prescribed manner, the
 information required by the Act and also 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, 2012:
 
 ii) In the case of the Profit and Loss Account, of the Loss for the
 period ended on that date; and
 
 iii) In the case of the Cash Flow Statement, of the Cash Flow of the
 Company for the period ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT
 
 [Referred to in above the Auditor''s Report of even date to the
 Members of Lloyds Steel Industries Limited on the Financial
 Statements for the period ended 31st March 2012]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As per the information and explanation given to us, fixed assets
 are physically verified by the management according to a phased
 programmed designed to cover all the locations which in our opinion, is
 reasonable having regard to the size of the company and the nature of
 its assets. Pursuant to the programmed, the management during the period
 physically verified the fixed assets at certain locations and no
 material discrepancies were noticed on such verification.
 
 (c) In our opinion and according to the information and explanation
 given to us, the company has disposed off an insignificant part of the
 fixed assets during the period.  Thus, paragraph 4(i) (c) of the
 Companies (Auditor''s Report) Order, 2003 is not applicable.
 
 2.  (a) Inventory has been physically verified by the management during
 the period. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, 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 the information & explanations
 given to us, the Company is maintaining proper records of inventory.
 The discrepancies noticed on verification between the physical stocks
 and the book records were not material.
 
 3.  (a) According to information and explanation given to us, the
 Company has neither granted nor taken any secured or unsecured loans to
 from companies, firms, parties covered in the register maintained under
 Section 301 of the Act.
 
 In view of the above, provisions of clause 4(iii) (b). (c),