We have audited the attached Balance Sheet of RANJEEV ALLOYS
 LIMITED,MANDI GOBIIMDGARH as at 31st, March,2011 and also the Profit &
 Loss also 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 statement based on our audit.
 
 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
 statement are free of material misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 discioures 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 (Auditor''s Report) order, 2003 issued by
 the Central Government of India in terms of sub-section (4A) of section
 227 of the Companies Act, 1956, We report a statement on the matters
 specified in paragraphs ''4'' and ''5'' of the said order :
 
 1 . a) The company has maintained proper records showing full
 Particulars including quantitative details and situation of fixed
 assets.
 
 b) The Management has certified that it has conducted a physical
 verification of the fixed assets at reasonable intervals, which in our
 opinion is reasonable, having regard to the size of the company &
 nature of its assets. No material discrepancies have been noticed on
 such verification.
 
 c) During the year, the company has not disposed off substantial part
 of fixed assest and the going concern status of the company is not
 affected.
 
 2 . a) As explained to us, inventories have been physically verified
 during the year by the management. In our opinion, the frequency of
 verfication is reasonable.
 
 b) The procedures of physical verification of Inventories followed by
 the management is reasonable and adequate in relation to the size of
 the company and nature of its business.
 
 c) The company has maintained proper records of invntories. The
 discrepancies noticed on physical verification of inventory as compared
 to the book records, which in our opinion,were not material, have been
 properly dealt within the books of accounts.
 
 3 . a) There are four persons covered in the register maintained under
 section 301 of the Compenies Act, 1956 to which the company has granted
 the loans/advances.The maximum amount involved during the year was
 Rs.33,10 lacs & the year-end balance of such loans/advances granted
 stands at Rs. 17.80 lacs.
 
 b) In our opinion and according to the information and explanation
 given to us, the rate of interset and terms & conditions of such loans
 granted are not prime facie, prejudicial to the interest of the
 Company, however, no interest has been charged on the advances given to
 persons,except Ranjeev Steels Pvt.Ltd.,M.Gvg.
 
 c) The company is regularly receving the principal amount and interest
 thereon except as stated in (b) above.
 
 d) Overdue amount of loan granted to companies, firm or other parties
 listed in the register maintained under section 301 of Companies Act,
 1956 stands at Rs.17.80 lacs which is stil! standing to be received.  ''
 
 e) The company has taken loans from one company & two persons during
 the year covered in the register maintained under section 301 of the
 companies Act,1956,
 
 The maximum amount involved during the year was Rs.9.91 crores and the
 year-end balance of loans taken including already standing in the
 opening was Rs,2.48 Lacs and this deposit pertains to directors &
 relatives.
 
 f) In our opinion and according to the information and explanation give
 to us, the rate of interest and terms & condition of such loans taken
 are not prime facie, prejudical to the interest of the Company.  .
 
 g).The company is regular in repaying the principal amount as
 stipulated and have been regular in payment of interest wherever
 interest has been allowed on these loans.
 
 4 . In our opinion and according to the information and explanation
 given to us, there are adequate internal control system commensurate
 with the size of the company and nature of business with regard to
 purchase of inventory, fixed assets and with regard to 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
 system.
 
 5 . a) According to the information and explanation give to us, we are
 of the opinion that particular of contracts or arrangement refferred to
 in section 301 of the Companies Act, 1956 have been entered in the
 register required to be maintained under that section,
 
 b) In our opinion and according to the information and explanation
 given to us, the transaction made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the companies Act, 1956 and 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.
 
 6 . In our opinion & according to the information and explanation given
 to us, the company has complied with the provision of section 58A and
 58A4of the companies Act, 1956 and the companies (Acceptance of
 Deposits) Rules, 1975 with regards to the deposits accepted from the
 public, however, no deposits have been, accepted from the public except
 unsecured demand loans from associate firms, friends'' firm & relatives
 of director have been accepted & repaid in ordinary course of business.
 No order has been passed by the Oompay Law Board or National Company
 Tribunal or Reserve Bank of India or any Court or any other Tribunal.
 
 7 . In our opinion, the company has an adequate Internal Audit System
 commensurate with the size and the nature of the company''s business.
 
 8 . We have broadly reviewed the books of accounts relating to
 materials, labour and other items of cost maintained by the company
 pusuant to the Rules made by the Central Government for the maintenance
 of cost records under section 207(l)(b) of the companies Act, 1956 and
 we are of the opinion that the prime facie the prescribed accounts and
 records have been made and maintained.
 
 9 . a) The company is regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Employees'' State Insurance, Family Pension, Adminstrative Charges &
 Linked Insurance Fund, Income Tax, Sales Tax, Central Sales Tax, Wealth
 Tax, Service Tax Custom Duty, Excise Duty, Cess and other '' material
 statutory dues applicable to it except VAT.
 
 b) According to the information and explanation given to us, no
 undisputed amount payable in respect of aforesaid dues were in arrears,
 as at 31st March, 2011, for a period of more than six months from the
 date they became payable.
 
 c) According to the information and explanations given to us, there are
 no dues of Sale Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty
 and Cess which have not been depoisted on account of any dispute,
 except Income Tax for Rs. 1,377,218/- for A.Y.2008-09 & Excise Duty for
 Rs. 1,079,720/- wherein the disputes are pending with appellate
 authorities.
 
 10.  In our opinion, the accumulated losses of the company are not more
 than fifty percent of its net worth. The company has incurred cash
 losses for Rs.93.26 lacs during the financial year covered by our
 audit, however, there was no cash losses in the immediately preceding
 financial year.
 
 11.  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 a financial institution, Bank or Debenture holders except that the
 company has defaulted in making repayment of C/c & LC development loan
 pertaining to IDBI.
 
 12.  In our opinion and according to the information and explanations
 given to us, no loans and advances have been granted by the company on
 the basis of security by way of pledge of shares,deberttures and other
 securities.
 
 13 In our opinion, the company is not a chit fund or a Nidhi/Mutual
 benefit fund/society. Therefore, clause 4(xiii) of the companies
 (Auditor''s Report) Order, 2003 is not applicable to the company. 
 
 14 The company is not dealing in or trading in shares, securities,
 debentures and other investments and therefore the question of
 mamtenaces or records in respectthese does not arise.
 
 15 The company has not given any guarantee for loan taken by others
 form Bank or financial institutions.
 
 16 In our opinion, no term loan has been raised during the year and as
 such its applicability is inapplicable as per information & explanation
 given by the management.
 
 17 According to the information and explanation given to us and on an
 overall examination of the balance sheet of the company, we report that
 no funds raised on short-terms basis has been used from long-term
 investment.
 
 18 Based on our examination of record and the information provided to
 us by management we report that the company has not made preferantial
 allotment of shares of parties and companies covered in the register
 maintained under section 301 of the companies Act, 1956.
 
 19 During the period covered by our audit report, the companies has not
 issued debentures and therefore the question of creation of any
 security/charge in respect of these debentures does not arise.
 
 20 The company has not raised arty money by way of public issue during
 the year.
 
 21 Based on the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the company has been noticed or reported during the course of our
 audit.
 
 Further to our comments referred to above, we report that :
 
 i) We have obtained all the information and explanations, which to the
 best of our information and belief were very necessary for the purpose
 of our audit;
 
 ii) In our opinion, proper books of accounts as required by law have
 been kept by the company so far as appear from our examination of those
 books,
 
 iii) The Balance sheet & Profit &. Loss Account dealt with by this
 report are in agreement with the book of accounts.
 
 iv) In our opinion, the Balance Sheet & Profit & Loss Account dealt
 with by this report comply with the accounting standards referred to in
 Sub-Section (3C) of the Section 211 of the companies Act, 1956.
 
 v) On the basis of written representation recevied from the Directors,
 as on 31st March, 2011 and taken on records by the Board of Directors,
 we report that none of the directors is disqualified as on 31st
 Mar,2011 from being appointed as a director in terma of Clause (g) of
 sub-section (1) of section 274 of companies Act,1956.
 
 vi) In our opinion and to the best of our information and according to
 the explanation given to us, the said accounts give the information
 required by the companies Act, 1956, in the manner so required and
 gives a true & fair view in conformity with accounting principals
 generally accepted in India :
 
 a) In the case of Balance Sheet, of the state of affairs of the company
 as at 31st March, 2011 and
 
 b) In the case of the Profit & Loss Account, of the profit for the year
 ended on that date; and
 
 c) In the case of Cash Flow Statement, of cash flows for the year ended
 to that date.
 
 For M/S S. K. BHALLA & CO.
 
 Chartered Accountants
 
 (S.K. BHALLA)
 
 Partner       
 
 Membership No:81783
 
                              PLACE : KHANNA
 
                              DATED : 03.09.11