1.  We have audited the attached Balance Sheet of MAHALAXMI SEAMLESS
 LIMITED, as at March 31, 2011 and the related Profit and Loss Account and 
 Cash Flow Statement for the year ended on that date, annexed thereto, which 
 we have signed under reference to this report. These financial statements
 are the responsibility of the Management of the Company.  Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 2.  We have 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 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, 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.  a
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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) i) We were not provided with the raw materials purchase invoices of
 Rs. 46,11,758 and expenses invoices of Rs. 1,07,17,258.
 
 ii) The company has not maintained proper stock records showing
 quantitative details of each class of inventory.
 
 Except for the above, 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) The Accounting Standard 15 requires the Company to make provision of
 retirement benefits viz earned leave on accrual basis and accounted for
 in accordance with the prescribed method.  The Company has not
 determined and accounted the liability in accordance with that and
 accordingly adequate disclosure has not been made. The amount in
 respect of the same has also not been quantified and hence the effect
 thereof on profit and liability is unascertained.
 
 Except for the above, 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, 2011 from being
 appointed as a Director in terms of clause (g) of sub-section (1) of
 Section 274 of the Act;
 
 f) i) The Company has not taken prior sanction of Board and/or approval
 of the CentralGovernment far entering into contracts as required under 
 Section 297
 
 (1) of the Companies Act, 1956 in respect of fallowing transactions:
 
                Nature of      Transaction    Closing    Maximum 
 Name of the 
 Persons        Transaction
                                Amount        Balance    Amount
                                (Rs            (Rs       (Rs.)
 
                Purchases     1,16,81,328 
 VinayakTubes                 1/74/53,783     59''29''922   95''97''167
 
 Riddi Siddhi 
 & Co ~         Sales         12,73,112 ~        (3,371)   12,76,139
 
 Sarayu Issue                   
 
 Management     Services         24.818          42.354       70,000
 Pvt. Ltd._
 
 Vinayak
 Steels         Purchases      5.48.447      1,60,98,849 1,60,98,849
 
 bales                      1,66,47,296
 
 Excel tubes 
 Corporation   Sales         35,61,275         9,98,912   17,13,442
 
 Madras Steels 
 & Tubes        Purchases     47.52.377        12,74,355   65,12,150
 
               Sales        2,52,28,651
 
 Amount in brackets indicate amount payable by the company
 
 ii) The company has not taken approval of shareholders by way of
 special resolution to appoint Mr Rishi Jalan, a relative of director on
 a yearly remuneration of Rs. 6,00,000 under section 314(1) of companies
 Act''1956.
 
 iii) The service tax credit of Rs. 17,01,726 is outstanding in books of
 accounts but the amount is not reflected in service tax register. The
 company is not having proper records for the utilization of service tax
 credit and in our opinion the amount may not be available for credit.
 The current assets are overstated by Rs. 17,01,726.
 
 iv) The Company has not ascertained and disclosed information as
 required by the Micro, Small and Medium Enterprises Development Act,
 2006. (refer note II (j) in Schedule 20 - Notes to Accounts).
 
 g) Subject to our remarks in clause (b), (d) and (f) above, 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 Statement 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, 2011;
 
 ii) in the case of the Profit and Loss Account, of the Loss for the
 year ended on that date; and
 
 iii in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of Auditors'' Report of even date to
 the members of Mahalaxmi Seamless Limited on the Accounts for the year
 ended March 31, 2011
 
 1.  a) In our opinion Company is not maintaining proper records to show
 full particulars, including quantitative details and situation of its 
 fixed assets.
 
 b) As explained to us, the fixed assets of the Company have been
 physically verified during the year by the Management, but in view of
 inadequate fixed asset records we are unable to comment on
 discrepancies.
 
 c) The Company has not disposed off substantial parts of fixed assets
 during the year.
 
 2.  a) As explained to us, the inventory of the Company has been
 physically verified by the Management during the year and at the year 
 end. Inventory lying with third parties and in transit have been verified 
 by the management with reference to the confirmation received from them 
 and/or subsequent receipt of goods.
 
 b) Based on the explanations provided, 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, the company has not maintained proper stock records
 showing quantitative details of each class of inventory. Hence, we are
 unable to comment whether the discrepancies between the physical
 inventory and the book records noticed on physical verification as
 mentioned in 2(a) above are material or not.
 
 3.  a) The Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained 
 under Section 301 of the Act.
 
 b) The Company has taken interest free unsecured loans from Companies,
 firms or other parties covered in the register maintained under Section
 301 of the Act.
 
 No of Parties            Maximum amount          Closing Balance
 
                           outstanding                 (Rs)
 
                              (Rs)
 
 One(l)                     7,00,000                    Nil
 
 c) In our opinion the term and conditions of such loan are prima facie
 not prejudicial to the interest of the company.
 
 4.  In our opinion, there are no adequate internal control procedures
 to 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. Further, during the course of our audit we have neither
 come across nor have we been informed of any instance of continuing
 failure to correct major weaknesses in the aforesaid internal control
 procedures.
 
 5.  i) To the best of our knowledge and according to the information
 and explanations given to us, the Company has entered into the transaction exceeding Rs. 5,00,000 that need
to be entered in the register pursuant 
 to Section 301 of the Act.
 
 ii) In our opinion, and according to the information and explanation
 given to us, the transaction made in pursuance of such contract or
 arrangement and aggregating during the year to rupees five lacs or more
 in respect of each party have been made at prices which are reasonable
 having regards to the prevailing market prices at the relevant time,
 where such prices are available.
 
 6.  The Company has not accepted any deposits under the provisions of
 Section 58A and 58AA of the Act and the rules framed there under.
 
 7.  In our opinion, the Company''s present internal audit system is not
 commensurate with its size and the nature of its business.
 
 8.  The Company has not maintained cost records in terms of Section 209
 (l)(d) of the Act for its products.
 
 9.  a) According to the books and records as produced and examined by
 us in accordance with generally accepted auditing practices in India and 
 also based on Management representations, in our opinion the Company is generally regular in depositing
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 as applicable, with 
 the appropriate authorities in India except as given below :
 
 Name of the       Nature of  Amount   Period to   Due Date .Date of
 
 Statute           the Dues   (Rs.)    which the              Payment
 
                                       amount 
                                       relates
 
 Maharashtra      Profession  3,356    March 
                                       2010        20th 
                                                   April       Not Paid 
                                                               till
 
 Profession        Tax                             2010        date
 
 Tax, 1975
 
 Finance  Act,    Service
                  Tax          7938    September,  05th 
                                                   October,    Not Paid 
                                                               till
 
 1994                                   2009       2009        date
 
 Finance  Act,    Service 
                  Tax        47,487    February    05th
                                                   March      Not Paid
                                                              till
 
 1994                                   2010       2010       date
 
 Finance Act,     Service 
                  Tax        51,083    March 
                                        2010       31st 
                                                   March,      Not Paid
                                                               till
 1994                                              2010        date
 
 b) According to the information and explanations given to us, there are
 no dues of Income Tax, Wealth Tax, Custom Duty, Service Tax, Excise
 Duty and cess which have not been deposited with the appropriate
 authority on account of any dispute.
 
 10.  The Company has no accumulated losses as at the end .of the
 financial year and it has incurred cash losses in the current financial
 year and in the immediately proceeding financial years.
 
 11.  According to the records of the Company, the Company has not
 defaulted in repayment of dues to financial institution or banks during
 the year.
 
 12.  The Company has not granted any loans or advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  In our opinion, considering the nature of activities carried on by
 the Company during the year, the provisions of any special statute
 applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
 applicable to it.
 
 14.  The Company has not dealt or traded in shares, securities,
 debentures or other investments during the year.
 
 15.  As informed to us, the Company has not given any guarantee for the
 loans taken by others from banks or financial institutions during the
 year.
 
 16.  On the basis of review of utilization of funds on overall basis
 and related information available to us, the term loans taken by the
 Company have been applied for the purposes for which they are obtained.
 
 17.  On the basis of review of utilization of funds on an overall
 basis, related information as made available to us and as represented
 to us by the Management, funds raised on short term basis have not been
 used for long term investment.
 
 18.  The Company has not made any preferential allotment of shares
 during the year.
 
 19.    The Company has not issued debentures.
 
 20 The Company has not raised any money by public issue during the
 year.
 
 21. Based on our examination of the books of accounts carried out in
 accordance with the generally accepted Auditing Standards in India and
 according to the information and explanations given to us we report
 that no fraud on or by the company has been noticed or reported during
 the year.
 
                                                For V.B. GOEL & CO.  
                                                Chartered Accountants
                                                FRN - 115906W
 
 
 
                                                (Vikas Goel)
 
                                                 Partner
 
                                                 Membership No. 39287
 
 Place: Mumbai
 
 Date: 1-12-11