1.  We have audited the attached Balance Sheet of REMI EDELSTAHL
 TUBULARS LTD. as at 31st March, 2011, 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
 Company''s management.  Our responsibility is to express an opinion on
 these financial statements based on our audit.
 
 2.  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.
 
 3.  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 enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 (i) we have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purpose of our
 Audit;
 
 (ii) 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;
 
 (iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (iv) in our opinion, the Balance Sheet, Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of section 211 of
 the Companies Act, 1956;
 
 (v) on the basis of written representations received from the
 Directors, as on 31 st March, 2011, and taken on record by the Board of
 Directors, we report that none of the director is disqualified as on 31
 st March, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956;
 
 (vi) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts togetherwith notes
 thereon, gives 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:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 (b) in the case of the Profit and Loss Account, of the PROFIT for the
 year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN OUR REPORT OF EVEN DATE
 TO THE MEMBERS OF REMI EDELSTAHL TUBULARS LTD.. AS AT 31ST MARCH 20111
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) According to the information and explanations given to us, all the
 assets have not been physically verified by the management during the
 year but there is a regular programme of verification which, in our
 opinion, is reasonable having regard to the size of the Company and the
 nature of its assets. To the best of our knowledge, no material
 discrepancies were noticed on such verification.
 
 (c) The Company has not disposed off substantial part of fixed assets
 during the year.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management were 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 and 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 having regard to the size of the
 operations of the Company.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has granted unsecured loans to two Companies covered in the
 register maintained under section 301 of the Companies Act, 1956.
 Amount involved during the year was Rs. 61.00 Lacs and closing balance
 was Rs. 2.04 lacs.
 
 (b) In our opinion the rate of interest and other terms and conditions
 of the unsecured loans given by the Company are not prima-facie
 prejudicial to the interest of the Company.
 
 (c) In our opinion receipt of the principal amount and interest are
 also regular.
 
 (d) According to the information and explanations given to us, the
 Company has taken unsecured loans from two companies covered in the
 register maintained under section 301 of the Companies Act, 1956.
 Amount involved during the year was Rs. 572.30 Lacs and closing balance
 was Rs. 10.20 Lacs.
 
 (e) In our opinion the rate of interest and other terms & conditions of
 unsecured loans taken by the Company are not prima facie prejudicial to
 the interest of the Company.
 
 (f) In our opinion payment of the principal amount and interest are
 also regular.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchases of inventory and 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 control systems.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that the transactions that need to be entered into
 the register maintained under section 301 of the Companies Act, 1956
 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions 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 lakhs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices except for items
 of specialized nature, where a question of comparison does not arise.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public
 and hence the directives issued by the Reserve Bank of India and
 provisions of sections 58A and 58AA or any other relevant provisions of
 the Companies Act, 1956 and the Companies (Acceptance of Deposits)
 Rules, 1975 are not applicable.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209(1 )(d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained. We have not,
 however, made a detailed examination of the records with a view to
 determine whether they are accurate or complete.
 
 (ix) (a) According to the information and explanations provided to us,
 the Company is generally regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Investor Education 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 to it with appropriate
 authorities and there were no undisputed arrears as at 31 st March,
 2011 for a period of more than six months from the date they become
 payable.
 
 (b) According to the information and explanations given to us, the
 particulars of dues of Income tax, Wealth tax, Service tax, Sales tax,
 Customs Duty, Excise Duty and Cess as at 31st March, 2011, which have
 not been deposited on account of a dispute, are as follows: -
 
 Sr.  Name of the     Nature of      Amount      From where dispute
 No.  Statute         dues            (Rs.)        is pending
 
 1   Central Excise   Central Excise  70,94,153  Comm. Of Central
     Act, 1944        Dues                       Excise (Appeal)
 
 (x) The Company does not have accumulated losses and has not incurred
 cash losses during the financial year covered by our audit and in the
 immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to a
 financial institution, bank or debenture holders.
 
 (xii) According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/
 mutual benefit fund/society and therefore, the provisions of clause
 4(xiii) of the Order are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Order are not applicable to the
 Company.
 
 (xv) In our opinion, the terms and conditions on which the Company has
 given guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest of the Company.
 
 (xvi) According to the information and explanations given to us, the
 Company has applied the term loans for the purposes for which the loans
 were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that the no funds raised on short-term basis have been used for
 long-term investment.
 
 (xviii) According to the information and explanations given to us,
 there was no preferential allotment of shares to parties covered in the
 register maintained under section 301 of the Act during the year.
 
 (xix) According to the information and explanations given to us, the
 Company has not issued any secured debentures during the period covered
 by our report. Accordingly, the provisions of clause (xix) of the order
 are not applicable to the Company.
 
 (xx) According to the information and explanations given to us, the
 Company has not raised any money by public issue during the year.
 
 (xxi) To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 has been noticed or reported during the course of our audit.
 
                                    For SUNDARLAL, DESAI AND KANODIA,
 
                                               CHARTERED ACCOUNTANTS,
 
                                            Registrarion No. 110560W
 
                                                                Sd/-
 
                                                       (M. B. DESAI)
 PLACE    :  MUMBAI                                         PARTNER.
 
 DATED    :  30th May, 2011                 Membership Number 33978