Auditor Report of Ranjeev Alloys Ltd.

Mar 31, 2013

1. We have audited the accompanying financial statements of Ranjeev Alloys Limited, which comprises the Balance Sheet as at March 31, 2013, the statement of profit and loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial statements:

2. The management is responsible for the preparation of these financial statements that give a true and Fairview 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 section 211(3C) 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:

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing 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 from material misstatements.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedure selected depend upon auditor''s judgment; including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting polices used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to best of our information and accounting to the explanations given to us, the aforesaid financial statements to give the information required by the Act 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 March 31,2013;

b) In the case of the statement of Profit and Loss, 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.

Report on other Legal and Regulatory Requirements

7. The Companies (Auditor''s Report) Order, 2003 issued by Central Government of India in terms of section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the order.

8. As required by Section 227(3) of the Act, we report that:

a) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose 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, the statement of profit and loss, and the cash flow statement dealt with by this report are in agreement with the books of account.

d) In our opinion Balance Sheet, the statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in section 211(3C)of the Act;

e) On the bases of the written representations received from the directors as on March 31,2013, taken on record by the board of directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of Section 274(1 )(g) of the Act.

As required by the Companies (Auditor''s Report) Order, 2003 issued by Central Government of India in terms of sub-section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the 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 interval, which in our opinion is reasonable, having regards to the size of the company and nature of its assets. No material discrepancies have been noticed on such verification,

c) During the year, the company has not disposed off any further remaining fixed asset and the going concern status of the company is affected substantially as manufacturing business has already ceased to exist in previous year and further Iron & Steel trading has been done at a very low ebb.

2. a) As explained to us, there are no inventories with the company during the current relevant year & as such physical verification is inapplicable.

b) The procedures of physical verification of inventories followed by the management is also applicable in absence of the inventories.

c) Maintenance of proper records of inventories and its physical verification is also inapplicable in absence of any inventory. Further proper records and physical verification have duly been maintained in case of a very small purchase and sales made by the company.

3. a) There is only one person covered in the registered maintained under section 301 of the company Act 1956 to which the company has granted the advance.

The maximum amount involved during the year was Rs.61acs & the year end balance of such loans/advances granted including already granted advances to two persons in previous year stands at Rs. 18.55lacs.

b) In our opinion and according to the information and explanation given to us, the rate of interest and the terms and conditions of such loans granted are prime facie, prejudicial to the interest of the company as no interest has been charged on the advances given to stated persons.

c) The company is not regularly receiving the principal amount and interest thereon.

d) Overdue amount of loan granted to companies, firms or other parties listed in the register maintained under section 301 of company''s Act 1956 stands at Rs. 18.55lacs which is still standing to be received.

e) The company has taken loan from one company during the year covered in the registered maintained under section 301 of companies Act, 1956

The maximum amount involved during the year was Rs.33.40acs & the year- end balance of this loan stands at Rs.33.401acs.

(f) In our opinion and according to the information and explanation given to us, the rate of interest and the terms and conditions of such loans taken are not prime facie, prejudicial to the interest of the company as no interest has been allowed on the loans taken.

(g) The company is not 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 regards 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 explanations given to us, we are of the opinion that particular of contracts or arrangement referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section, if any,

b) In our opinion and according to the information and explanation given to us, the transaction made in pursuance of contracts or arrangement entered in the register maintained under section 301 of companies Act, 1956 and exceeding the value of Rupees five laces 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, if any

6. In our opinion and according to the information and explanation given to us, the company has complied with the provisions of section 58 A and 58AA of 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 loan raised from the associated company accepted in ordinary course of business which is still outstanding. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the company has an adequate internal control system

commensurate with the size of the company and nature of business

8. We have broadly reviewed the books of accounts relating to materials, labor and other

items of cost maintained by the company pursuant to rules made by the Central Government for the maintenance of cost records under section 207(1 )(b) of the companies Act, 1956 and we are 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, Administrative Charges & Linked Insurance Fund, Income tax, Sales Tax, Central Sales Tax, Wealth Tax, Service Tax, Custom Tax, Excise Duty, Cess and other material statutory dues applicable to it.

b) according to the information and explanation given to us, no undisputed amounts payable in respect of aforesaid dues were in arrear, as at 31st March, 2013, for a period of more than six months from the date they became payable,

c) According to the information and explanation given to us, there is no dues of Sales Tax,, Custom duty, wealth tax, service tax, Excise duty, and cess which have not been deposited on account of any disputes.

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. 13.55 laces during the financial year covered by our audit, however, there was cash losses of Rs.26.65lacs in the immediately preceding financial year.

11. According to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to a financial institutions. Banks or debenture holders except that the company has defaulted in making repayment of C/c, BP under LC development loan pertaining to IDBI as the accounts are in operative since 23.12.10 and as such, the entire amount of Rs.6.85 Crores under C/c amount & Rs.5.55 Crores under BP account are payable. Further interest on the above referred accounts has not been provided as the accounts are NPA.

12.In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the bases 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, 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 maintenances or records in respect of these 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-term 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 preferential 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 any 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.

FOR M/S S.K. BHALLA & CO.

Chartered Accountants For Ranjeev Alloys Ltd.

(S.K. BHALLA)

Director

Partner PLACE: KHANNA

Membership No:81783 DATED:30.05.2013

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Mar 31, 2012

We have audited the attached Balance Sheet of RANJEEV ALLOYS LIMITED,MANDI GOBINDGARH as at 31st, March,2012 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 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 (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 al 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. Outing the year, the company has disposed off substantial part of fixed assets and the going concern status of the company is affected substantially as manufacturing business has ceased to exist and further Iron & Steel trading has been done at a very low ebb.

2 . a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of verification 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

c) The company has maintained proper records of inventories. 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 five persons covered in the register maintained under section 301 of the Companies Act, 1956 to which the company has granted the loans/advances. The maximum amount involved during the year was Rs.110.17 lacs & the year-end balance of such loans/advances granted stands at Rs.114.13 lacs.

b) In our opinion and according to the information and explanation given to us, the rate of interest and terms & conditions of such loans granted are prime facie, prejudicial to the interest of the Company as no interest has been charged on the advances given to the stated persons.

c) The company is not regularly receiving the principal amount and interest thereon.

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.114.13 lacs which is still standing to be received .

e) The company has taken loans from one company & one HUF 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. 10.75 crores and the year-end balance of loans taken including already standing in the opening was Rs.MIL Lacs and this deposit pertains to directors & relatives.

o in our opinion and according to the information and explanation giv, to os. the rate of interest and terms 8, condition of such loans taken are not prime face, g,mount 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 and nature of business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. going 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 referred to in section 30! of the Companies Act, 1956 have been entered in the register required to be maintained under that section contracts or arrangements entered in the register

b) In our opinion & according to the information and explanation given to us the company has completed with the provision of section 58A and 58AA of 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 expect unsecured demands loans from associate firms firm & related 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, Act, 1956 and the companies (Acceptance of Deposits) Rules, 1975 the regardless to: he & 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.

We have broadly reviewed the books of account relating to material by the company pursuant to the rules made by the central Government for the maintenance of cost records under section 207 (1) (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. 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 Employee state insurance family pension Administrative charge & linked insurances fund income tax sales tax control sales wealth tax service tax custom duty excise duty cess and other material statutory dues applicable to it.

b) According to the information and explanation given to us, no undisputed amounts payable In respect of aforesaid dues were in arrea as at 31st March, 2012, 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 sales tax custom duty Wealth Tax Service Tax Excise Duty and Cess which have not been deposited on account of any dispute Excise duty for Rs. 1,079,720/- where the dispute are pending with applicable authorities.

10. In our opinion the accumulate losses of the company are more that fifty present of its net worth the company has incurred cash losses for Rs.26.65.lacs during the financial year covered by our audit however there was cash losses of RS. 27,04, LACS IN THE IMMEDIALTLY PRECENDING FINANCIAL YEAR.

12 in our opinion and acting to the information and explanations given to us, no loans and advances have been granted by the company on the basis of secant 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, 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 maintenances or records in respect of these 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-term 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 preferential 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 any 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 received from the Directors, as on 31st March, 2012 and taken on records by the Board of Directors, we report that none of the directors is disqualified as on 31st Mar,2012 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, they 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, 2012 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 &

Chartered Accouter

(S.K. BHALLA)

Partner place : KHANNA

Membership No:81783 DATED : 25.08.12

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Mar 31, 2011

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

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Mar 31, 2010

We have audited the attached Balance Sheet of RANJEEV ALLOYS LIMITED,MANDI GOBINDGARH as at 31st March,2010 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 companys 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 discloures 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 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 S 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 is one company and four persons covered in the register maintained under section 301 of the Companies Act, 1956 to which the company has granted the loans/ advances.The maximum amount involved during the year was Rs.12.46 crores & the year-end balance of such loans/ advances granted stands at Rs. NIL.

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) There is no overdue amount of loan granted to companies, firm or other parties listed in the register maintained under section 301 of Companies Act, 1956.

e) The company has taken loans from one company & one 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.5.89 crores and the year- end balance of loans taken including already standing in the opening was Rs.18.40 Lac and this deposit pertains to directors and 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 tacie, 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 o! 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 58AAof 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 Compay 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 companys 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(1)(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 SalesTax, Wealth Tax, Service Tax Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

b) According to the information and explanation given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears, as at 31st March, 2010, 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, Custome Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been depoisted on account of any.

10. In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. The company has not incurred any cash losses during the financial year covered by our audit and 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.

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 ot 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, clause 4(xiii) of the companies {Auditors 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 maintenaces or records in respect of these 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, the term loan raised during the year has been applied for which it was raised 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 any 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 S 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, 2010 and taken on records by the Board of Directors, we report that none of the directors is disqualified as on 31st Mar, 10 from being appointed as a director in terms 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, 2010 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 S. K. BHALLA & CO.

Chartered Accountants

Plac : Khanna (S. K. BHALLA) Dated : 01.09.2010 Partner

Membership No: 81783